Mesenchymal stromal cells (MSCs) are committed progenitors of mesodermal origin that are found virtually in every organ and exhibit multilineage differentiation into osteocytes, adipocytes and chondrocytes. MSCs also mediate a wide spectrum of immunoregulatory activities that usually dampen innate and adaptive immune responses. These features have attracted interest in the perspective of developing novel cell therapies for autoimmune disease. However, depending on the microenvironmental conditions, MSCs may show a plastic behavior and switch to an immunostimulatory phenotype. After thorough characterization of the effects of MSCs on the immune system, MSC cell therapy has been tested in animal models of autoimmunity using different cell sources, protocols of in vitro expansion and routes and schedules of administration. The pre-clinical results have been encouraging in some models [e.g. Crohn's disease (CD), multiple sclerosis] and heterogeneous in others (e.g. graft-versus-host disease, systemic lupus erythematosus, rheumatoid arthritis). Clinical trials have been carried out and many are ongoing. As discussed, the results obtained are too preliminary to draw any conclusion, with the only exception of topical administration of MSCs in CD that has proven efficacious. The mechanism of action of infused MSCs is still under investigation, but the apparent paradox of a therapeutic effect achieved in spite of the very low number of cells reaching the target organ has been solved by the finding that MSC-derived extracellular vesicles (EVs) closely mimic the therapeutic activity of MSCs in pre-clinical models. These issues are critically discussed in view of the potential clinical use of MSC-derived EVs.