Adipose-derived stem cells (ASCs) can self-renew and differentiate along multiple cell lineages. ASCs are also potently anti-inflammatory due to their inherent ability to regulate the immune system by secreting anti-inflammatory cytokines and growth factors that play a crucial role in the pathology of many diseases, including multiple sclerosis, diabetes mellitus, Crohn’s, SLE, and graft-versus-host disease. The immunomodulatory effects and mechanisms of action of ASCs on pathological conditions are reviewed here.