Chronic wounds remain a major challenge in modern medicine and represent a significant burden, affecting not only physical and mental health, but also productivity, health care expenditure, and long-term morbidity. Even under optimal conditions, the healing process leads to fibrosis or scar. One promising solution, cell therapy, involves the transplantation of progenitor/stem cells to patients through local or systemic delivery, and offers a novel approach to many chronic diseases, including nonhealing wounds. Mesenchymal stem cells are multipotent, adult progenitor cells of great interest because of their unique immunologic properties and regenerative potential. A variety of preclinical and clinical studies have shown that mesenchymal stem cells may have a useful role in wound-healing and tissue-engineering strategies and both aesthetic and reconstructive surgery. Recent advances in stem cell immunobiology can offer insight into the multiple mechanisms through which mesenchymal stem cells could affect underlying pathophysiologic processes associated with nonhealing mesenchymal stem cells. Critical evaluation of the current literature is necessary for understanding how mesenchymal stem cells could potentially revolutionize our approach to skin and soft-tissue defects and designing clinical trials to address their role in wound repair and regeneration.