Mesenchymal stem cells (MSCs) are primary candidates in cell therapy and tissue engineering and are being tested in clinical trials for a wide range of diseases. Originally isolated and expanded as plastic adherent cells, MSCs have intriguing properties of in vitro self-assembly into three-dimensional (3D) aggregates reminiscent of skeletal condensation in vivo. Recent studies have shown that MSC 3D aggregation improved a range of biological properties, including multilineage potential, secretion of therapeutic factors, and resistance against ischemic condition. Hence, the formation of 3D MSC aggregates has been explored as a novel strategy to improve cell delivery, functional activation, and in vivo retention to enhance therapeutic outcomes. This article summarizes recent reports of MSC aggregate self-assembly, characterization of biological properties, and their applications in preclinical models. The cellular and molecular mechanisms underlying MSC aggregate formation and functional activation are discussed, and the areas that warrant further investigation are highlighted. These analyses are combined to provide perspectives for identifying the controlling mechanisms and refining the methods of aggregate fabrication and expansion for clinical applications.