Advances in neonatal medicine have led to increased survival of infants born at the limits of viability, resulting in an increased incidence of bronchopulmonary dysplasia (BPD). BPD is a chronic lung disease of premature infants characterized by the arrest of alveolarization, fibroblast activation, and inflammation. BPD leads to significant morbidity and mortality in the neonatal period and is one of the leading causes of chronic lung disease in children. The past decade has brought a surge of trials investigating cellular therapies for the treatment of pulmonary diseases. Mesenchymal stem cells (MSCs) are of particular interest because of their ease of isolation, low immunogenicity, and anti-inflammatory and reparative properties. Clinical trials of MSCs have demonstrated short-term safety and tolerability; however, studies have also shown populations of MSCs with adverse pro-inflammatory and myofibroblastic characteristics. Cell-based therapies may represent the next breakthrough therapy for the treatment of BPD, however, there remain barriers to implementation as well as gaps in knowledge of the role of endogenous MSCs in the pathogenesis of BPD. Concurrent high-quality basic science, translational, and clinical studies investigating the fundamental pathophysiology underlying BPD, therapeutic mechanisms of exogenous MSCs, and logistics of translating cellular therapies will be important areas of future research.