In adults, human mesenchymal stem cells (hMSCs) are found in vivo at low frequency and are defined by their capacity to differentiate into bone, cartilage, and adipose tissue, depending on the stimuli and culture conditions under which they are expanded. Although MSCs were initially hypothesized to be the panacea for regenerating tissues, MSCs appear to be more important in therapeutics to regulate the immune response invoked in settings such as tissue injury, transplantation, and autoimmunity. MSCs have been used therapeutically in clinical trials and subsequently in practice to treat graft-versus-host disease following bone marrow transplantation. Reports of successful immune modulation suggest efficacy in a wide range of autoimmune conditions, such as demyelinating neurological disease (multiple sclerosis), systemic lupus erythematosus, and Crohn's disease, among others. This review provides background information about hMSCs and also describes their putative mechanisms of action in inflammation. We provide a summary of ongoing clinical trials to allow (a) full comprehension of the range of diseases in which hMSC therapy may be beneficial and (b) identification of gaps in our knowledge about the mechanisms of action of therapeutic MSCs in disease.