Among the surgical options for large full-thickness chondral injuries, cell-based therapy has been practiced and its satisfactory outcomes have been reported. One area that appears promising is cell-based therapies utilizing stem cells. Various tissues within the human body contain mesenchymal stem cells (MSCs) from where these can be harvested. These include bone marrow, adipose, synovium, peripheral blood, and umbilical cord. In this article, both preclinical animal studies and clinical studies dealing with the use of MSCs for cartilage repair of the knee are reviewed. Majority of the clinical papers have shown promising results; however, there are a limited number of studies of high evidence level. Clinical significance of the stem cell therapy as compared to other surgical options as well as optimization of the procedure in terms of cell type and delivery method is still to be determined.