Mesenchymal stromal cells (MSCs) have been shown to mediate immune responses in vitro and in vivo. These observations have led to clinical trials of MSC administration to ameliorate acute graft-versus-host disease (GVHD), the most serious complication arising after allogeneic hematopoietic cell transplantation. Clinical data suggest a benefit in approximately two-thirds of patients with steroid-resistant acute GVHD. Preliminary studies have been reported on the use of MSCs to treat de novo acute GVHD, for prophylaxis of the condition, and more recently, in the management of chronic GVHD. Although preclinical data inferred a possible role of MSCs in affecting GVHD mechanisms, more robust animal models became available only after numerous clinical trials with these cells had been undertaken. Further clinical trials, the development of more appropriate animal models and an effective means of tracking and imaging the introduced cells in real time in patients, are required to better define their role in this important area of medicine.