Mesenchymal stem cells (MSC) are non-haematopoietic cells that are prevalent in the adult bone marrow but can also be isolated from a variety of other postnatal tissues. MSC are non-immunogenic and are immunosuppressive, with the ability to inhibit maturation of dendritic cells and suppress the function of naïve and memory T cells, B cells and NK cells. In addition to their immunomodulatory properties, MSC are capable of differentiating into various tissues of mesenchymal and non-mesenchymal origin and migrating to sites of tissue injury and inflammation to participate in tissue repair. A number of studies in animal models of cardiac injury, stroke and ischaemic renal injury have demonstrated the clinical potential of MSC in tissue regeneration and repair. MSC are currently being evaluated in various preclinical and clinical studies in humans and offer significant potential as a novel cellular therapy for tissue regeneration and immunological conditions. The present review focuses on the unique immunomodulatory and regenerative properties of MSC and their potential role in the treatment of kidney disease.