Osteoarthritis (OA), a prevalent chronic condition with a striking impact on quality of life, represents an enormous societal burden that increases greatly as populations age. Yet no approved pharmacological intervention, biologic therapy or procedure prevents the progressive destruction of the OA joint. Mesenchymal stem cells (MSCs)-multipotent precursors of connective tissue cells that can be isolated from many adult tissues, including those of the diarthrodial joint-have emerged as a potential therapy. Endogenous MSCs contribute to maintenance of healthy tissues by acting as reservoirs of repair cells or as immunomodulatory sentinels to reduce inflammation. The onset of degenerative changes in the joint is associated with aberrant activity or depletion of these cell reservoirs, leading to loss of chondrogenic potential and preponderance of a fibrogenic phenotype. Local delivery of ex vivo cultures of MSCs has produced promising outcomes in preclinical models of joint disease. Mechanistically, paracrine signalling by MSCs might be more important than differentiation in stimulating repair responses; thus, paracrine factors must be assessed as measures of MSC therapeutic potency, to replace traditional assays based on cell-surface markers and differentiation. Several early-stage clinical trials, initiated or underway in 2013, are testing the delivery of MSCs as an intra-articular injection into the knee, but optimal dose and vehicle are yet to be established.