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Heart failure is a leading cause of morbidity and mortality worldwide. The current strategies for treatment are limited and new therapeutic approaches are needed. This review describes research performed in animal models of cardiac disease and clinical trials and discusses the mechanisms involved in possible beneficial effects of cell therapy. Cell therapy is a promising strategy to treat heart failure, as it aims to replenish the failing myocardium with contractile elements. However, cell therapy with adult progenitor cells induces a small improvement in heart function without significant cardiomyogenesis. Paracrine mechanisms are likely to be important. The most effective cell type for therapy remains unclear. Induced pluripotent stem cells have the greatest potential but more information on the properties of this cell type is needed. The integration of cells in the host myocardium and the routes of delivery remain controversial. The differentiation of cardiac cells from pluri- and multipotent cells and the understanding of their properties are growing points in cell therapy. More research is needed to correctly assess the physiological properties of differentiating cells, to dissect the role of the host environment in the integration and differentiation and to define the stage of differentiation required for cell transplantation.