In recent decades, the biomedical applications of mesenchymal stem cells (MSCs) have attracted increasing attention. MSCs are easily extracted from the bone marrow, fat, and synovium, and differentiate into various cell lineages according to the requirements of specific biomedical applications. As MSCs do not express significant histocompatibility complexes and immune stimulating molecules, they are not detected by immune surveillance and do not lead to graft rejection after transplantation. These properties make them competent biomedical candidates, especially in tissue engineering. We present a brief overview of MSC extraction methods and subsequent potential for differentiation, and a comprehensive overview of their preclinical and clinical applications in regenerative medicine, and discuss future challenges.