This review describes the current state of the science on mesenchymal stem cell (MSC) treatment for acute lung injury (ALI). The general characteristics, regenerative potential, and mechanism of action of MSCs are first presented. Next, particular emphasis is placed on the application of MSCs for the treatment of acute respiratory distress syndrome (ARDS) in preclinical and clinical studies. Finally, we discuss current challenges and future directions in the field presented from a clinician-researcher perspective. The objective of this work is to provide the readership with a current review of the literature discussing the hurdles and overall promise of MSCs as therapeutic interventions for the treatment of ARDS.