Multipotent mesenchymal stem cells (MSCs) represent a promising autologous source for regenerative medicine. Because MSCs can be isolated from adult tissues, they represent an attractive cell source for autologous transplantation. A straightforward therapeutic strategy in the field of stem cell-based regenerative medicine is the transplantation of functional differentiated cells as cell replacement for the lost or defective cells affected by disease. However, this strategy requires the capacity to regulate stem cell differentiation toward the desired cell fate. This therapeutic approach assumes the capability to direct MSC differentiation toward diverse cell fates, including those outside the mesenchymal lineage, a process termed transdifferentiation. The capacity of MSCs to undergo functional transdifferentiation has been questioned over the years. Nonetheless, recent studies support that genetic manipulation can serve to promote transdifferentiation. Specifically, forced expression of certain transcription factors can lead to reprogramming and alter cell fate. Using such a method, fully differentiated lymphocytes have been reprogrammed to become macrophages and, remarkably, somatic cells have been reprogrammed to become embryonic stem-like cells. In this review, we discuss the past and current research aimed at transdifferentiating MSCs, a process with applications that could revolutionize regenerative medicine.