<p>Chronic inflammation is central to the pathogenesis of numerous severe diseases, and current therapeutic approaches are limited by suboptimal efficacy and significant adverse effects. The emergence of mesenchymal stem cells (MSCs) represents a groundbreaking advance, owing to their potent immunomodulatory and tissue-reparative capacities. Among diverse MSC sources, gingival mesenchymal stem cells (GMSCs) exhibit distinct advantages. Since their therapeutic potential was first demonstrated in 2009, GMSCs have shown considerable promise as a cellular therapeutic modality in a range of preclinical models. This review discusses the major immunomodulatory functions of GMSCs and synthesizes preclinical evidence supporting their therapeutic potential in two distinct but complementary domains: (1) chronic inflammatory conditions, including arthritis and periodontitis; and (2) broader regenerative medicine applications, such as nerve injury, bone injury, stroke, and tracheal defect repair. GMSCs attenuate inflammation and promote tissue repair through the secretion of anti-inflammatory factors. These mechanisms have been validated in various animal models, demonstrating promising therapeutic efficacy and favorable safety profiles. Additionally, this article explores innovative strategies—such as three-dimensional (3D) culture systems—to enhance GMSC therapeutic potential, as well as their applications in regenerative medicine. As technological advances continue to evolve, including the use of engineered extracellular vesicles (EVs) to fine-tune GMSC function, the future of precision immunotherapy and regenerative medicine utilizing GMSCs is highlighted. Collectively, fundamental research on GMSC-based therapies has elucidated the multiple immunomodulatory and regenerative pathways employed by these cells to achieve therapeutic effects, underscoring their substantial potential across both chronic inflammation and regenerative medicine applications.</p>