Spinal cord injury (SCI) is a neurodegenerative disorder of the central nervous system (CNS) that can lead to permanent loss of sensation and voluntary movement beyond the affected area. Extensive preclinical and clinical trials have been conducted to evaluate the safety and effectiveness of stem cells for the treatment of various CNS diseases or disorders, including SCI. However, several challenges hinder nerve cell regeneration in the injured spinal cord, such as extensive cell loss, limited neural cell regeneration capacity, axonal disruption, and the presence of growth-inhibiting molecules, particularly astroglial scarring or glial scars at the injury site in chronic cases. These obstacles pose significant challenges for physicians in restoring normal motor and sensory nerve function in both humans and animals following SCI. This review focuses on SCI pathogenesis, the mechanisms underlying the therapeutic potential of Mesenchymal Stem Cells (MSCs) in SCI, and the potential of stem cell-based therapies as promising avenues for treatment. This review article also included relevant preclinical and clinical data from animal studies.