Mesenchymal stem cells (MSC) are multipotent stem cells that hold promise for an expanding list of therapeutic uses, not only due to their ability to differentiate into all connective tissues including bone, fat and cartilage, but additionally due to their trophic and anti-inflammatory effects which contribute to healing and tissue regeneration. Ongoing research is starting to illuminate important aspects of the microenvironmental niche, which supports MSC self-renewal. In this review, we summarize recent findings on cellular structures and molecular pathways that are involved in regulation of MSC self-renewal versus differentiation, and in retention of MSCs within the niche versus mobilization and recruitment to sites of injury. In addition, the contribution of MSCs to the structure and function of hematopoietic and cancerous niches is discussed.