Mesenchymal stromal cells (MSCs) have immunomodulatory effects and are increasingly being used for the treatment of acute and chronic GVHD. Although they seem immuno-privileged, they induce alloresponses, but the risk of immunization is poorly characterized. After infusion, they first reach the lungs, liver and spleen, and are then difficult to trace. Several mechanisms are involved in stromal cells suppressing alloreactivity, such as induction of regulatory T cells, but whether or not this will also affect leukemic relapse or increase infections is not known. Although several encouraging pilot studies have been published, there have been few prospective randomized trials. There may be a bias in the literature, as negative results are seldom published, and there have been few comparative studies with other immunosuppressive regimens. Most animal models have failed to show any effect on GVHD. Several questions remain to be answered for optimization of stromal cell therapy. Which source is optimal-BM, fat, cord or decidua? Can stromal cells be replaced by exosomes, which culture conditions are most appropriate and at what passage and how frequently should cells be administered? More research is required to move stromal cell therapy forward to become an established treatment for acute and chronic GVHD.