Mesenchymal stem cells (MSCs) have garnered attention for their potential in tissue regeneration due to their ability to self-renew, differentiate into various cell types, and modulate immune responses. MSCs can be harvested from numerous tissues, including bone marrow, umbilical cords, and adipose tissue. Initially believed to regenerate tissue by directly engrafting at damaged sites, it is now understood that MSCs primarily exert their effects through the secretion of bioactive factors, which modulate nearby cells, enhance extracellular matrix remodeling, and promote angiogenesis. In skin wound healing, MSCs can reduce scarring by migrating to injury sites and supporting the growth of fibroblasts and endothelial cells. In cartilage regeneration, MSCs, particularly those derived from bone marrow and umbilical cords, show promise in treating osteoarthritis and other joint disorders, often used with scaffolds to enhance tissue repair. There are two main types of MSCs derived from the umbilical cord: human MSCs from umbilical cord blood (UCB-MSCs) and MSCs from Wharton’s jelly (WJ-MSCs). WJ-MSCs are derived from Wharton’s jelly using isolation techniques, which yield higher concentrations of MSCs and greater viability. Dry arthroscopy, a minimally invasive technique, allows for precise MSC delivery to cartilage defects, reducing complications and improving outcomes. Clinical trials continue to explore MSC applications, particularly in older patients and those with early osteoarthritis, highlighting the need for standardized protocols.