Mesenchymal stem cells (MSC) are a group of cells present in bone-marrow stroma and the stroma of various organs with the capacity for mesoderm-like cell differentiation into, for example, osteoblasts, adipocytes, and chondrocytes. MSC are being introduced in the clinic for the treatment of a variety of clinical conditions. The aim of this review is to provide an update regarding the biology of MSC, their identification and culture, and mechanisms controlling their proliferation and differentiation. We also review the current status of their clinical use. Areas in which research is needed to enhance the clinical use of MSC are emphasized.