The potential role of mesenchymal stem cells (MSCs, also called mesenchymal stromal cells) in endogenous repair and cell-based therapies for acute kidney injury (AKI) is under intensive investigation. Preclinical studies indicate that administered MSCs both ameliorate renal injury and accelerate repair. These versatile cells home to sites of injury, where they modulate the repair process. The mechanisms responsible for their protective and regenerative effects are incompletely understood. Some have reported that MSCs are capable of direct engraftment into injured nephrons under certain circumstances. This is highly controversial, however, and even those who argue there is engraftment acknowledge that the primary means of repair by these cells most likely involves paracrine and endocrine effects, including mitogenic, antiapoptotic, anti-inflammatory, and angiogenic influences. There is a good deal of interest in MSC-based approaches for the treatment of human kidney injury, thanks to positive preclinical results, the strong clinical need for novel therapies to treat AKI, the ease of isolation and expansion of MSCs, and encouraging preliminary clinical trial results in other fields. This review summarizes current knowledge and identifies gaps in our understanding of MSC biology that will need to be filled in order to translate recent discoveries into therapies for AKI in humans.