Recently, a unique population of progenitor cells was isolated from human menstrual blood. The human menstrual blood progenitor cells (MBPCs) possess many advantages, such as the noninvasive acquisition procedure, broad multipotency, a higher proliferative rate, and low immunogenicity, and have attracted extensive attention in regenerative medicine. Preclinical studies to test the safety and efficacy of MBPCs have been underway in several animal models. However, relevant studies in type 1 diabetes mellitus (T1DM) have not yet been proceeded. Herein, we studied the therapeutic effect of MBPCs and the mechanism of β-cell regeneration after MBPC transplantation in the T1DM model. Intravenous injection of MBPCs can reverse hyperglycemia and weight loss, prolong lifespan, and increase insulin production in diabetic mice. Histological and immunohistochemistry analyses indicated that T1DM mice with MBPC transplantation recovered islet structures and increased the β-cell number. We further analyzed in vivo distribution of MBPCs and discovered that a majority of MBPCs migrated into damaged pancreas and located at the islet, duct, and exocrine tissue. MBPCs did not differentiate into insulin-producing cells, but enhanced neurogenin3 (ngn3) expression, which represented endocrine progenitors that were activated. Ngn3(+) cells were not only in the ductal epithelium, but also in the islet and exocrine tissue. We analyzed a series of genes associated with the embryonic mode of β-cell development by real-time polymerase chain reaction and the results showed that the levels of those gene expressions all increased after cell transplantation. According to the results, we concluded that MBPCs stimulated β-cell regeneration through promoting differentiation of endogenous progenitor cells.