Aims The purpose of our study was to determine whether mesenchymal stem cells (MSCs) are an effective and safe therapeutic agent for the treatment of knee osteoarthritis (OA), owing to their cartilage regeneration potential. Methods We searched PubMed, Embase, and the Cochrane Library, with keywords including “knee osteoarthritis” and “mesenchymal stem cells”, up to June 2019. We selected randomized controlled trials (RCTs) that explored the use of MSCs to treat knee OA. The visual analogue scale (VAS), Western Ontario and McMaster University Osteoarthritis Index (WOMAC), adverse events, and the whole-organ MRI score (WORMS) were used as the primary evaluation tools in the studies. Our meta-analysis included a subgroup analysis of cell dose and cell source. Results Seven trials evaluating 256 patients were included in the meta-analysis. MSC treatment significantly improved the VAS (mean difference (MD), –13.24; 95% confidence intervals (CIs) –23.28 to –3.20, p = 0.010) and WOMAC (MD, –7.22; 95% CI –12.97 to –1.47, p = 0.010). The low-dose group with less than 30 million cells showed lower p-values for both the VAS and WOMAC. Adipose and umbilical cord–derived stem cells also had lower p-values for pain scores than those derived from bone marrow. Conclusion Overall, MSC-based cell therapy is a relatively safe treatment that holds great potential for OA, evidenced by a positive effect on pain and knee function. Using low-dose (25 million) and adipose-derived stem cells is likely to achieve better results, but further research is needed. Cite this article: Bone Joint Res 2020;9(10):719–728.