Background: Differentiation of stem cells into pancreatic beta cells is a global challenge in reconstructive medicine for the treatment of diabetes. Studies have shown that compounds derived from walnut green skin can differentiate stem cells into beta cells. Flavonoid compounds appear to be the main cause of this differentiation. Objectives: This study examined the effect of flavonoid compounds in walnut green skin on the differentiation of pancreatic beta cells. Methods: The present study conducted the differentiation of adipose tissue-derived mesenchymal stem cells (AD-MSCs) into insulin-producing cells under flavonoid extract at doses of 50 and 100 mg/ml for three weeks. For diabetic rats, streptozotocin was injected intraperitoneally at a dose of 60 mg/kg. To evaluate cell differentiation, this study utilized morphology, dithizone (DTZ) staining, insulin-proinsulin production, insulin beta-receptor by the immunofluorescence method, and insulin measurement by the ELISA method. Serum glucose, cholesterol, and lipids were measured by enzymatic colorimetric, enzyme kit, and autoanalyzer, respectively. The expression of pancreatic cell-specific genes, including Pancreatic and Duodenal Homeobox 1 (Pdx1) and Neurogenin-3 (Ngn3), was also assessed by real-time PCR. Results: Differentiated cells transformed from spindle-shaped to circular or clustered cells under the influence of flavonoid compounds with their specific DTZ staining being positive. The expression of insulin-proinsulin markers, beta receptors, and insulin secretion was also confirmed. Decreased blood lipids and glucose, as well as increased expression of Pdx1 and Ngn3 insulin-producing genes, were significant in the treatment groups (P<0.05). Conclusion: The findings showed that flavonoid compounds could effectively induce the differentiation of AD-MSCs into insulin-producing cells.