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Background and objectives Stem cell therapy has emerged as a potential treatment for type 1 diabetes mellitus (T1DM), offering the possibility of modifying disease progression. This systematic review and meta-analysis aimed to assess the efficacy and safety of stem cell therapy in patients with T1DM. Methods We searched PubMed, Embase, Web of Science, and CENTRAL for randomised controlled trials (RCTs) published until January 2025 that evaluated stem cell therapy in T1DM. The primary outcome was the glycated haemoglobin (HbA1c) level. The secondary outcomes included fasting C-peptide levels, insulin dose reduction, insulin independence, and adverse events. The risk of bias was assessed using the Risk of Bias 2.0 tool. Results Eight reports from seven RCTs (169 participants) were included. Stem cell therapy was associated with a marginal reduction in HbA1c at 6 months [mean difference (MD): -0.57%, 95% CI: -1.13 to -0.02] but not at 12 months (-0.49%, -0.98 to 0.00). Fasting C-peptide levels (ng/mL) showed slight improvement at both 6 months (0.03, 0.03 to 0.03) and 12 months (0.09, 0.05 to 0.13). None of the participants achieved insulin independence or experienced serious adverse events. The certainty of the evidence was rated as very low for all outcomes. Interpretation and conclusions Stem cell therapy may offer marginal improvements in HbA1c and fasting C-peptide levels in T1DM; however, these benefits are of limited clinical significance. Given the small sample sizes, high heterogeneity, and very low certainty of evidence, well-designed, adequately powered RCTs are required to establish the therapeutic role of stem cells in T1DM.