Mesenchymal stem cells (MSCs) are very attractive candidates in cell-based strategies that target inflammatory diseases. Preclinical animal studies and many clinical trials have demonstrated that human MSCs can be safely administered and that they modify the inflammatory process in the targeted injured tissue. Our laboratory developed a novel method that optimizes the anti-inflammatory effects of MSCs. We termed the cells prepared by this method MSC2. In this study, we determined the effects of MSC2-based therapies on an inflammation-linked painful diabetic peripheral neuropathy (pDPN) mouse model. Streptozotocin-induced diabetic mice were treated with conventionally prepared MSCs, MSC2, or vehicle at three specific time points. Prior to each treatment, responses to radiant heat (Hargreaves) and mechanical stimuli (von Frey) were measured. Blood serum from each animal was collected at the end of the study to compare levels of inflammatory markers between the treatment groups. We observed that MSC2-treated mice had significant improvement in behavioral assays compared with the vehicle and MSC groups, and moreover these responses did not differ from the observations seen in the healthy wild-type control group. Mice treated with conventional MSCs showed significant improvement in the radiant heat assay, but not in the von Frey test. Additionally, mice treated with MSC2 had decreased serum levels in many proinflammatory cytokines compared with the values measured in the MSC- or vehicle-treated groups. These findings indicate that MSC2-based therapy is a new anti-inflammatory treatment to consider in the management of pDPN.