**Abstract**

Mesenchymal stem cells (MSCs) are emerging as key players in regenerative medicine for the treatment of various diseases associated with the inflammation and degeneration, thereby aiding in therapeutic advancements. Several tissues have been identified as potential sources of MSCs including the bone marrow, cord blood, dental pulp, umbilical cord, adipose tissue, peripheral blood, and fetal liver, of which some are clinically recognized. MSCs are capable of differentiating into cells of multiple lineages and therefore established as suitable candidates for transplantation in damaged organs. They have added advantage of higher proliferation, easy expansion, and, more importantly, the absence of HLA class II receptors, with potential applications extending toward allogenic settings. MSCs are actively involved in different mechanisms related to repair and regeneration of tissues via immunomodulation, transdifferentiation, paracrine factors, etc. They are known to exhibit profound immunomodulatory effect on T and B cells and natural killer (NK) cells mediated via soluble factors and direct cell-cell contact. The MSCs activate the immune responses and inhibit proliferation, maturation, and differentiation of T and B cells. The MSC-activated immune responses induce the expression of regulatory T cells (Tregs). A plethora of studies have established that MSCs suppress immune responses via immunomodulation that makes them a preferred cell source for the use in clinical trials.

**Keywords:** MSCs, therapeutic, immunomodulatory, GvHD
