In spite of the advances in the knowledge of adult stem cells (ASCs) during the past few years, their natural activities in vivo are still poorly understood. Mesenchymal stem cells (MSCs), one of the most promising types of ASCs for cell-based therapies, are defined mainly by functional assays using cultured cells. Defining MSCs in vitro adds complexity to their study because the artificial conditions may introduce experimental artifacts. Inserting these results in the context of the organism is difficult because the exact location and functions of MSCs in vivo remain elusive; the identification of the MSC niche is necessary to validate results obtained in vitro and to further the knowledge of the physiological functions of this ASC. Here we show an analysis of the evidence suggesting a perivascular location for MSCs, correlating these cells with pericytes, and present a model in which the perivascular zone is the MSC niche in vivo, where local cues coordinate the transition to progenitor and mature cell phenotypes. This model proposes that MSCs stabilize blood vessels and contribute to tissue and immune system homeostasis under physiological conditions and assume a more active role in the repair of focal tissue injury. The establishment of the perivascular compartment as the MSC niche provides a basis for the rational design of additional in vivo therapeutic approaches. This view connects the MSC to the immune and vascular systems, emphasizing its role as a physiological integrator and its importance in tissue repair/regeneration.