Acute lung injury (ALI), and its more severe form, acute respiratory distress syndrome (ARDS), are syndromes of acute hypoxemic respiratory failure resulting from a variety of direct and indirect injuries to the gas exchange parenchyma of the lungs. Current treatment of ALI/ARDS is primarily supportive, with lung protective ventilation and fluid conserving strategies. Despite improvement in these strategies, recent data indicate that the mortality of ALI/ARDS is still as high as 30 to 50%. Thus, there is a need for innovative therapies to further improve clinical outcomes of ALI/ARDS. Recent studies involving the administration of mesenchymal stem cells (MSCs) for the treatment of experimental ALI/ARDS have shown promising results. This review focuses on existing studies that have tested the use of MSCs in models of ALI/ARDS, and the potential mechanisms underlying their therapeutic effects.