Over the past decade, mesenchymal stromal/stem cells (MSCs) have significantly advanced the field of cell-based regenerative medicine. Renowned for their self-renewal capacity, multilineage differentiation potential, and ability to promote tissue regeneration through both juxtacrine and paracrine mechanisms, MSCs also exhibit remarkable immunomodulatory properties. These attributes highlight their potential to repair or replace damaged tissues and organs, including the joints of individuals affected by osteoarthritis (OA). Nonetheless, several challenges remain to be resolved, including optimization of delivery strategies, control of cellular heterogeneity, enhancement of cell survival, mitigation of the hostile osteoarthritic microenvironment, and management of patient-to-patient variability in therapeutic response. In this manuscript, we present recent advances and innovative research efforts aimed at fully harnessing the therapeutic potential of MSCs and addressing the factors underlying their inconsistent clinical efficacy.