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Mesenchymal stem cells (MSCs) are a therapeutically efficient type of stem cells validated by their ability to treat many inflammatory and chronic conditions. The biological and therapeutic characteristics of MSCs can be modified depending on the type of microenvironment at the site of transplantation. Diabetes mellitus (DM) is a commonly diagnosed metabolic disease characterized by hyperglycemia, which alters over time the cellular and molecular functions of many cells and causes their damage. Hyperglycemia can also impact the success rate of MSCs transplantation; therefore, it is extremely significant to investigate the effect of high glucose on the biological and therapeutic attributes of MSCs, particularly their immunomodulatory abilities. Thus, in this study, we explored the effect of high glucose on the immunosuppressive characteristics of human adipose tissue‐derived mesenchymal stem cells (hAD‐MSCs). We found that hAD‐MSCs cultured in high glucose lost their immunomodulatory abilities and became detectable by immune cells. The decline in the immunosuppressive capabilities of hAD‐MSCs was mediated by significant decrease in the levels of IDO, IL‐10, and complement factor H and substantial increase in the activity of immunoproteasome. The protein levels of AMP‐activated protein kinase (AMPK) and phosphofructokinase‐1 (PFK‐1), which are integral regulators of glycolysis, revealed a marked decline in high glucose exposed MSCs. The findings of our study indicated the possibility of immunomodulatory shift in MSCs after being cultured in high glucose, which can be translationally employed to explain their poor survival and short‐lived therapeutic outcomes in diabetic patients. [ABSTRACT FROM AUTHOR]