Mesenchymal stem cells (MSCs) have received considerable attention in allogeneic hematopoietic cell transplantation because of their abilities to modulate immune responses and promote hematopoiesis. Because MSCs are capable of producing several cytokines and growth factors, they have been widely used in the treatment of graft-versus-host disease (GVHD). A number of clinical trials have demonstrated the safety and efficacy of MSC therapy for acute GVHD. Moreover, in Japan, allogeneic bone marrow-derived MSC product, TEMCELL®, was approved as a regenerative medicine for acute GVHD. Besides, MSCs can also produce bone marrow stroma and promote hematopoiesis, the co-transplantation of hematopoietic stem cells and MSCs have been efficiently performed in cord blood transplantation and HLA-mismatched transplantation to enhance engraftment and prevent GVHD. In this review, we provide an overview of clinical trials using MSCs in allogeneic hematopoietic cell transplantation and discuss the possibilities and optimization of MSC therapy.