Despite extensive researches in acute lung injury (ALI) and acute respiratory distress syndrome (ARDS), current pharmacological therapies and respiratory support are still the main methods to treat patients with ALI and ARDS and the effects remain limited. Hence, innovative therapies are needed to decrease the morbidity and mortality. Because of the proven therapeutic effects in other fields, mesenchymal stem cells (MSCs) might be considered as a promising alternative to treat ALI and ARDS. Numerous documents demonstrate that MSCs can exert multiple functions, such as engraftment, differentiation and immunoregulation, but now the key researches are concentrated on paracrine factors secreted by MSCs that can mediate endothelial and epithelial permeability, increase alveolar fluid clearance and other potential mechanisms. This review aimed to review the current researches in terms of the effects of MSCs on ALI and ARDS and to analyse these paracrine factors, as well as to predict the potential directions and challenges of the application in this field.