Mesenchymal stromal/stem cells (MSCs) were originally isolated from bone marrow (BM), but are now known to be present in all fetal and adult tissues. These multipotent cells can be differentiated into at least three downstream mesenchymal lineages that include bone, cartilage, and fat. However, under some experimental conditions, these cells can differentiate into nonmesenchymal cell types and/or participate in regeneration of damaged tissues through a variety of mechanisms. Most recently, MSCs have been derived from human embryonic stem cells (hESCs) through several different methodologies. Human MSCs derived from hESCs have been shown to possess characteristics very similar to BM-derived MSCs. Thus, the generation of MSCs from hESCs provides an opportunity to study the developmental biology of cells of mesenchymal lineages in an appropriate in vitro model. Furthermore, MSCs from different adult tissue sources are being actively investigated in a multitude of clinical trials; therefore, hESCs could provide an unlimited source of MSCs for potential clinical applications in the future. Such MSCs could be used without further differentiation for regeneration of tissues, or they could be directed towards specific lineage pathways, such as bone and cartilage, for reconstruction of tissues. Finally, immunomodulatory properties of hESC-derived MSCs are likely to prove valuable for inducing immune tolerance toward other cells or tissues derived from the same hESC lines.