Due to their trophic and immunoregulatory characteristics mesenchymal stem cells (MSCs) have tremendous potential for use in a variety of clinical applications. Challenges in MSCs’ clinical applications include low survival of transplanted cells and low grafting efficiency requiring use of a high number of MSCs to achieve therapeutic benefits. Accordingly, new approaches are urgently needed in order to overcome these limitations. Recent evidence indicates that modulation of autophagy in MSCs prior to their transplantation enhances survival and viability of engrafted MSCs and promotes their pro-angiogenic and immunomodulatory characteristics. Here, we review the current literature describing mechanisms by which modulation of autophagy strengthens pro-angiogenic and immunosuppressive characteristics of MSCs in animal models of multiple sclerosis, osteoporosis, diabetic limb ischemia, myocardial infarction, acute graft-versus-host disease, kidney and liver diseases. Obtained results suggest that modulation of autophagy in MSCs may represent a new therapeutic approach that could enhance efficacy of MSCs in the treatment of ischemic and autoimmune diseases.