Encouraging data from preclinical studies, and ongoing clinical trials, suggest that mesenchymal stem cells (MSCs) might provide the disease-modifying therapy that has long been lacking in osteoarthritis. If the potential of these multipotent cells is to be fully realized, subtleties such as minor phenotypic differences between specific MSC populations as well as the paracrine responses that transplanted MSCs elicit from joint-resident cells, must be better understood. MSC-related changes that occur in OA, the regenerative capacity of transplanted MSCs, and progress toward clinical use of such therapy are reviewed in this article.