Osteoarthritis (OA) is a multifaceted disease characterized by imbalances in extracellular matrix metabolism, chondrocyte and synoviocyte senescence, as well as inflammatory responses mediated by macrophages. Although there have been notable advancements in pharmacological and surgical interventions, achieving complete remission of OA remains a formidable challenge, oftentimes accompanied by significant side effects. Mesenchymal stem cells (MSCs) have emerged as a promising avenue for OA treatment, given their ability to differentiate into chondrocytes and facilitate cartilage repair, thereby mitigating the impact of an inflammatory microenvironment induced by macrophages. This comprehensive review aims to provide a concise overview of the diverse roles played by MSCs in the treatment of OA, while elucidating the underlying mechanisms behind these contributions. Specifically, the roles include: (a) Promotion of chondrocyte and synoviocyte regeneration; (b) Inhibition of extracellular matrix degradation; (c) Attenuating the macrophage-induced inflammatory microenvironment; (d) Alleviation of pain. Understanding the multifaceted roles played by MSCs in OA treatment is paramount for developing novel therapeutic strategies. By harnessing the regenerative potential and immunomodulatory properties of MSCs, it may be possible to devise more effective and safer approaches for managing OA. Further research and clinical studies are warranted to optimize the utilization of MSCs and realize their full potential in the field of OA therapeutics.