Mesenchymal stromal cells (MSCs), also known as mesenchymal stem cells, have been intensely investigated for clinical applications within the last decades. However, the majority of registered clinical trials applying MSC therapy for diverse human diseases have fallen short of expectations, despite the encouraging pre-clinical outcomes in varied animal disease models. This can be attributable to inconsistent criteria for MSCs identity across studies and their inherited heterogeneity. Nowadays, with the emergence of advanced biological techniques and substantial improvements in bio-engineered materials, strategies have been developed to overcome clinical challenges in MSC application. Here in this review, we will discuss the major challenges of MSC therapies in clinical application, the factors impacting the diversity of MSCs, the potential approaches that modify MSC products with the highest therapeutic potential, and finally the usage of MSCs for COVID-19 pandemic disease.