Being one of the most debilitating complications among diabetic patients, diabetic polyneuropathy (DPN) is a paramount point of continuous research. Stem cell therapies have shown promising results. However, limited cell survival and paracrine activities hinder its transfer from bench to bedside. We designed this study to evaluate fluoxetine-pretreatment technique of mesenchymal stem cells (MSCs) as an approach to enhance their paracrine and immunomodulatory properties in DPN. Effects of fluoxetine treatment of MSCs were tested in vitro. Forty-two adult Wistar male albino rats were utilized, further subdivided into control, diabetic, MSC-treated and fluoxetine-pretreated MSC groups. Sciatic nerve sections were prepared for light and electron microscope examination and immunohistochemical detection of neurofilament (NF) protein. Also, we assessed in vitro survival and paracrine properties of fluoxetine-pretreated MSCs. Real time PCR of BDNF, VEGF, IL-1β, and IL-10 expression in tissue homogenate was performed. Our results showed restoration of normal neuronal histomorphology and ultrastructure, moreover, immunohistochemical expression of anti-neurofilament protein was significantly elevated in MSC-treated groups compared to the diabetic one. Fluoxetine enhanced the MSC survival and their paracrine properties of MSCs in vitro. Furthermore, the fluoxetine-pretreated MSC group revealed a significant elevation of mRNA expression of BDNF (neurotrophic factor) and VEGF (angiogenic factor), denoting ameliorated MSC paracrine properties. Similarly, improved immunomodulatory functions were evident by a significant reduction of interleukin-1β mRNA expression (pro-inflammatory) and a reciprocal significant increase of interleukin-10 (anti-inflammatory). We concluded that fluoxetine-pretreatment of MSCs boosts their survival, paracrine, and immunomodulatory traits and directly influenced neuronal histomorphology. Hence, it presents a promising intervention of diabetic polyneuropathy. Graphical Abstract.