Inflammatory skin disorders that cause serious deterioration of the quality of life have become one of the major public concerns. Despite their significance, there is no fundamental cure to date. Mesenchymal stem cells (MSCs) possess unique immunomodulatory properties which make them a promising tool for the treatment of various inflammatory diseases. Our recent preclinical and clinical studies have shown that MSCs can be successfully used for the treatment of atopic dermatitis (AD), one of the major inflammatory skin diseases. This observation along with similar reports from other groups revealed the efficacy and underlying mechanisms of MSCs in inflammatory dermatosis. In addition, it has been proposed that cell priming or gene transduction can be novel strategies for the development of next-generation high-efficacy MSCs for treating inflammatory skin diseases. We discuss here existing evidence that demonstrates the regulatory properties of MSCs on immune responses under inflammatory conditions.