Mesenchymal stem cells (MSCs) are being widely studied as potential cell therapy agents due to their immunomodulatory properties, which have been established by in vitro studies and in several clinical trials. Within this context, mesenchymal stem cell therapy appears to hold substantial promise, particularly in the treatment of conditions involving autoimmune and inflammatory components. Nevertheless, many research findings are still contradictory, mostly due to difficulties in characterization of the effects of MSCs in vivo. The purpose of this review is to report the mechanisms underlying mesenchymal stem cell therapy for acute graft-versus-host disease, particularly with respect to immunomodulation, migration, and homing, as well as report clinical applications described in the literature.