Endoplasmic reticulum (ER) dysfunction is a potential contributor to the impaired repair capacity of periodontal tissue in diabetes mellitus (DM) patients. Restoring ER homeostasis is thus critical for successful regenerative therapy of diabetic periodontal tissue. Recent studies have shown that metformin can modulate DM-induced ER dysfunction, yet its mechanism remains unclear. Herein, we show that high glucose elevates the intracellular miR-129-3p level due to exocytosis-mediated release failure and subsequently perturbs ER calcium homeostasis via downregulating transmembrane and coiled-coil domain 1 (TMCO1), an ER Ca2+ leak channel, in periodontal ligament stem cells (PDLSCs). This results in the degradation of RUNX2 via the ubiquitination-dependent pathway, in turn leading to impaired PDLSCs osteogenesis. Interestingly, metformin could upregulate P2X7R-mediated exosome release and decrease intracellular miR-129-3p accumulation, which restores ER homeostasis and thereby rescues the impaired PDLSCs. To further demonstrate the in vivo effect of metformin, a nanocarrier for sustained local delivery of metformin (Met@HALL) in periodontal tissue is developed. Our results demonstrate that compared to controls, Met@HALL with enhanced cytocompatibility and pro-osteogenic activity could boost the remodeling of diabetic periodontal tissue in rats. Collectively, our findings unravel a mechanism of metformin in restoring cellular ER homeostasis, enabling the development of a nanocarrier-mediated ER targeting strategy for remodeling diabetic periodontal tissue.