Major Depressive Disorder (MDD), colloquially known as depression, is a debilitating condition affecting an estimated 3.8% of the population globally, of which 5.0% are adults and 5.7% are above the age of 60. MDD is differentiated from common mood changes and short-lived emotional responses due to subtle alterations in gray and white matter, including the frontal lobe, hippocampus, temporal lobe, thalamus, striatum, and amygdala. It can be detrimental to a person’s overall health if it occurs with moderate or severe intensity. It can render a person suffering terribly to perform inadequately in their personal, professional, and social lives. Depression, at its peak, can lead to suicidal thoughts and ideation. Antidepressants manage clinical depression and function by modulating the serotonin, norepinephrine, and dopamine neurotransmitter levels in the brain. Patients with MDD positively respond to antidepressants, but 10–30% do not recuperate or have a partial response accompanied by poor life quality, suicidal ideation, self-injurious behavior, and an increased relapse rate. Recent research shows that mesenchymal stem cells and iPSCs may be responsible for lowering depression by producing more neurons with increased cortical connections. This narrative review discusses the plausible functions of various stem cell types in treating and understanding depression pathophysiology.