Mesenchymal stromal cells (MSCs) are multipotent cells that can be isolated from several human tissues and expanded ex vivo for clinical use. MSCs are identified by their adherent properties, immunephenotype, and differentiation potential. MSCs display immunological properties that have been demonstrated both in vitro and in vivo, in animal models and in humans, although the exact mechanisms underlying these effects remain largely unknown. MSCs preferentially home to damaged tissue and secrete paracrine factors with anti-inflammatory properties. The immunomodulatory and reparative and anti-inflammatory properties of MSCs have been tested in a variety of animal models and have been applied in specific clinical settings. Potential clinical applications of MSCs include prevention and treatment of therapy-resistant acute graft-versus-host disease, prevention and treatment of rejection after either hematopoieitc stem cell and solid organ transplantation, tissue repair, and treatment of inborn errors and autoimmune diseases. This review focuses on recent advances that have broadened our understanding of the biological and functional properties of MSCs, which are increasingly attracting the attention of researchers involved in the optimization of approaches for reparative and regenerative cell therapy, as well as in the perspective of modulating immune response against alloantigens or, even, autoantigens.