The therapeutic potential of mesenchymal stromal cells (MSCs) is evident by the number of new and ongoing trials targeting an impressive variety of conditions. In bone and cartilage repair, MSCs are expected to replace the damaged tissue, while in other therapies they modulate a therapeutic response by the secretion of bioactive molecules. MSCs possess a phenotypic plasticity and harbor an arsenal of bioactive molecules that can be released upon sensing signals in the local milieu either directly or packaged in extracellular vesicles (EVs). The reported paracrine effects comprise many of the important functions of MSCs, including supporting hematopoietic stem cells in the bone marrow, promoting angiogenesis, and modulating the immune system. The major drawback in MSC therapy is the incomplete understanding of cell fate following systemic administration as well as the mechanisms by which these cells correct disease. In this review we discuss what is known about MSC engraftment, hemocompatibility, and immunomodulation, as well as the potential of bringing the MSC-EV field toward a clinical translation.