Regenerative medicine is an emerging interdisciplinary field of research that uses several technological approaches including stem cells to repair tissues. Mesenchymal stem cells (MSCs), a type of adult stem cell, have generated a great amount of interest over the past decade in this field. Numerous studies have explored the role of MSCs in tissue repair and modulation of allogeneic immune responses. The mechanisms through which MSCs exert their therapeutic potential rely on some key properties of the cells as follows: the capacity to differentiate into osteoblasts, chondrocytes, adipocytes, cardiomyocytes, hepatocytes, endothelial, and neuronal cells; the ability to secrete multiple bioactive molecules capable of stimulating the recovery of injured cells and inhibiting inflammation; the lack of immunogenicity; and the ability to perform immunomodulatory functions. In the present review, we focus on these three aspects upon which the therapeutic effects of MSCs are mainly based. Furthermore, some pathological conditions under which the application of MSCs should be done with caution are also mentioned.