Mesenchymal stem cells (MSCs) have rapidly been applied in a broad field of immune-mediated disorders since the first successful clinical use of MSCs for treatment of graft-versus-host disease. Despite the lack of supporting data, expectations that MSCs could potentially treat most inflammatory conditions led to rushed application and development of commercialized products. Today, both pre-clinical and clinical studies present mixed results for MSC therapy and the discrepancy between expected and actual efficacy of MSCs in various diseases has evoked a sense of discouragement. Therefore, we believe that MSC therapy may now be at a critical milestone for re-evaluation and re-consideration. In this review, we summarize the current status of MSC-based clinical trials and focus on the discrepancy between expected and actual outcome of MSC therapy from bench to bedside. Importantly, we discuss the underlying limitations of MSCs and suggest a new guideline for MSC therapy in hopes of improving their therapeutic efficacy.