The intriguing biology of stem cells and their vast clinical potential is emerging rapidly for gene therapy. Bone marrow stem cells, including the pluripotent haematopoietic stem cells (HSCs), mesenchymal stem cells (MSCs) and possibly the multipotent adherent progenitor cells (MAPCs), are being considered as potential targets for cell and gene therapy-based approaches against a variety of different diseases. The MSCs from bone marrow are a promising target population as they are capable of differentiating along multiple lineages and, at least in vitro, have significant expansion capability. The apparently high self-renewal potential makes them strong candidates for delivering genes and restoring organ systems function. However, the high proliferative potential of MSCs, now presumed to be self-renewal, may be more apparent than real. Although expanded MSCs have great proliferation and differentiation potential in vitro, there are limitations with the biology of these cells in vivo. So far, expanded MSCs have failed to induce durable therapeutic effects expected from a true self-renewing stem cell population. The loss of in vivo self-renewal may be due to the extensive expansion of MSCs in existing in vitro expansion systems, suggesting that the original stem cell population and/or properties may no longer exist. Rather, the expanded population may indeed be heterogeneous and represents several generations of different types of mesenchymal cell progeny that have retained a limited proliferation potential and responsiveness for terminal differentiation and maturation along mesenchymal and non-mesenchymal lineages. Novel technology that allows MSCs to maintain their stem cell function in vivo is critical for distinguishing the elusive stem cell from its progenitor cell populations. The ultimate dream is to use MSCs in various forms of cellular therapies, as well as genetic tools that can be used to better understand the mechanisms leading to repair and regeneration of damaged or diseased tissues and organs.