Umbilical cord mesenchymal stem cells (MSCs) are a unique, accessible, and non-controversial source of early stem cells that can be readily manipulated. As the most common pluripotent cell, bone marrow-derived MSCs display limitations with the progress of stem cell therapy. By contrast, umbilical cord-derived cells, which have plentiful resources, are more accessible. However, several uncertain aspects, such as the effect of donor selection or culture conditions, long-term therapeutic effects, product consistency, and potential tumorigenicity, are the bottleneck in this clinical therapy. MSCs are predicted to undergo an unprecedented development in clinical treatment when a generally acknowledged criterion emerges. In the current paper, we highlight the application of umbilical cord-derived MSCs in skin therapies based on our previous studies, as well as the achievements of our peers in this field. This paper focuses on the strategies, challenges, and potential of this novel therapy.