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The COVID-19 pandemic has significantly impacted the way of life worldwide and continues to bring high mortality rates to at-risk groups. Patients who develop severe COVID-19 pneumonia, often complicated with ARDS, are left with limited treatment options with no targeted therapy currently available. One of the features of COVID-19 is an overaggressive immune reaction that leads to multiorgan failure. Mesenchymal stromal cell (MSC) treatment has been in development for various clinical indications for over a decade, with a safe side effect profile and promising results in preclinical and clinical trials. Therefore, the use of MSCs in COVID-19-induced respiratory failure and ARDS was a logical step in order to find a potential treatment option for the most severe patients. In this review, the main characteristics of MSCs, their proposed mechanism of action in COVID-19 treatment and the effect of this therapy in published case reports and clinical trials are discussed.