Type 2 diabetes mellitus (T2DM) is a prevalent chronic metabolic disorder accompanied by high blood glucose, insulin resistance, and relative insulin deficiency. Endoplasmic reticulum (ER) stress induced by high glucose and free fatty acids has been suggested as one of the main causes of β-cell dysfunction and death in T2DM. Stem cell-derived insulin-secreting cells were recently suggested as a novel therapy for diabetes. In the present study, we demonstrate the therapeutic potential of tonsil-derived mesenchymal stem cells (TMSCs) to treat high-fat diet (HFD)-induced T2DM. To explore whether TMSC administration can alleviate T2DM, TMSCs were intraperitoneally injected in HFD-induced T2DM mice once every 2 weeks. TMSC injection markedly improved glucose tolerance and glucose-stimulated insulin secretion and prevented HFD-induced pancreatic β-cell hypertrophy and cell death. In addition, TMSC injection relieved the ER-stress response and preserved gene expression related to glucose sensing and insulin secretion. Moreover, administration of TMSC-derived conditioned medium induced similar therapeutic outcomes, suggesting paracrine effects. Finally, proteomic analysis revealed high secretion of insulin-like growth factor-binding protein 5 by TMSCs, and its expression was critical for the protective effects of TMSCs against HFD-induced glucose intolerance and ER-stress response in pancreatic islets. TMSC administration can alleviate HFD-induced-T2DM via preserving pancreatic islets and their function. These results provide novel evidence of TMSCs as an ER-stress modulator that may be a novel, alternative cell therapy for T2DM.