Background/Objectives: Animal studies have demonstrated the ability of stem cell therapy (SCT) to treat diabetic kidney disease (DKD). However, the safety and efficacy of SCT in patients with DKD remain unclear. This systematic review and meta-analysis aimed to investigate the safety and efficacy of SCT in patients with DKD. Methods: A comprehensive and systematic literature search was conducted using PubMed, EMBASE, Cochrane Library, and Web of Science to identify articles on SCT for DKD published up to March 2024. RevMan V.5.4 software was used for statistical analysis. Results: We identified four studies that included 90 participants, 53 (58%) of whom underwent SCT. SCT improved estimated glomerular filtration rate (eGFR) (mean difference [MD] = 0.41, 95% confidence interval [CI]: 0.08–0.74; p < 0.05), serum creatinine (SCr) reduction (standardized MD = -0.65, 95%CI: -1.19 to -0.1, p < 0.05), and microalbuminuria (MAU) (MD = -32.10, 95% CI: -55.26–8.94; p < 0.05) compared to the control group, but did not improve urine microalbumin/creatinine ratio (UACR) (MD = -63.36, 95% CI: 194.52–67.79, p = 0.56) or blood sugar (MD = 0.49, 95% CI: 4.16–2.01, p = 0.49). In addition, the incidence of adverse events was significantly high in both groups (risk ratio = 0.93; 95% CI: 0.74–1.17; p = 0.54); there was no significant difference regarding I ₂ = 0%). Conclusions: SCT can safely and effectively improve eGFR and SCr levels by lowering the MAU but cannot improve UACR and blood sugar levels.