Mesenchymal stem cell therapy (MSCT) for immune and inflammatory diseases continues to be popular based on progressive accumulation of preclinical mechanistic evidence. This has led to further expansion in clinical indications from graft rejection, autoimmune diseases, and osteoarthritis, to inflammatory liver and pulmonary diseases including COVID-19. A clear trend is the shift from using autologous to allogeneic MSCs, which can be immediately available as off-the-shelf products. In addition, new products such as cell-free exosomes and human pluripotent stem cell (hPSC)-derived MSCs are exciting developments to further prevalent use. Increasing numbers of trials have now published results in which safety of MSCT has been largely demonstrated. While reports of therapeutic endpoints are still emerging, efficacy can be seen for specific indications-including graft-vs-host-disease, strongly Th17-mediated autoimmune diseases, and osteoarthritis-which are more robustly supported by mechanistic preclinical evidence. In this review, we update and discuss outcomes in current MSCT clinical trials for immune and inflammatory disease, as well as new innovation and emerging trends in the field.