Novel coronavirus disease 2019 (COVID-19) is caused by severe acute respiratory syndrome coronavirus-2. The virus causes an exaggerated immune response, resulting in a cytokine storm and acute respiratory distress syndrome, the leading cause of COVID-19-related mortality and morbidity. So far, no therapies have succeeded in circumventing the exacerbated immune response or cytokine storm associated with COVID-19. Mesenchymal stem cells (MSCs), through their immunomodulatory and regenerative activities, mostly mediated by their paracrine effect and extracellular vesicle production, have therapeutic potential in many autoimmune, inflammatory, and degenerative diseases. In this paper, we review clinical studies on the use of MSCs for COVID-19 treatment, including the salutary effects of MSCs on the pathophysiology of COVID-19 and the immunomodulation of the cytokine storm. Ongoing clinical trial designs, cell sources, dose and administration, and populations are summarized, and the paracrine mode of benefit is discussed. We also offer suggestions for optimizing MSC-based therapies, including genetic engineering, strategies for cell surface modification, nanotechnology applications, and combination therapies.