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Mesenchymal stem cells (MSCs) can be isolated from almost all tissues and effectively expanded in vitro. Although their true in situ properties and biological functions remain to be elucidated, these in vitroexpanded cells have been shown to possess potential to differentiate into specific cell lineages. It is speculated that MSCs in situ have important roles in tissue cellular homeostasis by replacing dead or dysfunctional cells. Recent studies have demonstrated that in vitro expanded MSCs of various origins have great capacity to modulate immune responses and change the progression of different inflammatory diseases. As tissue injuries are often accompanied by inflammation, inflammatory factors may provide cues to mobilize MSCs to tissue sites with damage. Before carrying out tissue repair functions, MSCs first prepare the microenvironment by modulating inflammatory processes and releasing various growth factors in response to the inflammation status. In this review, we focus on the crosstalk between MSCs and immune responses and their potential clinical applications, especially in inflammatory diseases.