Organ transplantation remains to be a treatment of choice for patients suffering from irreversible organ failure. Immunosuppressive (IS) drugs employed to maintain the allograft have shown excellent short-term graft survival, but, their long-term use could contribute to immunological and non-immunological risk factors, resulting in graft dysfunctionalities. Upcoming IS regimes have highlighted the use of cell-based therapies, which can eliminate the risk of drug-borne toxicities while maintaining efficacy of the treatment. Mesenchymal stem cells (MSCs) have been considered as an invaluable cell type, owing to their unique immunomodulatory properties, which makes them desirable for application in transplant settings, where hyper-activation of the immune system is evident. The immunoregulatory potential of MSCs holds true for preclinical studies while achieving it in clinical studies continues to be a challenge. Understanding the biological factors responsible for subdued responses of MSCs in vivo would allow uninhibited use of this therapy for countless conditions. In this review, we summarize the variations in the preclinical and clinical studies utilizing MSCs, discuss the factors which might be responsible for variability in outcome and propose the advancements likely to occur in future for using this as a “boutique/personalised therapy” for patient care.