Mesenchymal stem cell (MSC) transplantation offers significant potential for the treatment of diabetes mellitus (DM) and its complications. However, hyperglycemic conditions can induce senescence and dysfunction in both transplanted and resident MSCs, thereby limiting their therapeutic potential. Mitochondrial dysfunction and oxidative stress are key contributors to this process in MSCs exposed to hyperglycemia. As such, strategies aimed at mitigating mitochondrial dysfunction could enhance the therapeutic efficacy of MSC transplantation in DM. In this review, we provide an updated overview of how mitochondrial dysfunction mediates MSC senescence. We present experimental evidence for the molecular mechanisms behind high glucose-induced mitochondrial dysfunction in MSCs, which include impairment of mitochondrial biogenesis, mitochondrial calcium regulation, the mitochondrial antioxidant system, mitochondrial fusion-fission dynamics, mitophagy, and intercellular mitochondrial transfer. Furthermore, we propose potential pharmacological candidates that could improve the efficacy of MSC transplantation by enhancing mitochondrial function in patients with DM and related complications.