Mesenchymal stem cells (MSCs) are multipotent progenitor cells that have the capacity to differentiate into all lineages of mesodermal origin, e.g., cartilage, bone, and adipocytes. MSCs have been identified at different stages of development, including adulthood, and in different tissues, such as bone marrow, adipose tissue and umbilical cord. Recent studies have shown that MSCs have the ability to migrate to injured sites. In this regard, an important characteristic of MSCs is their immunomodulatory and anti-inflammatory effects. For instance, there is evidence that MSCs can regulate the immune system by inhibiting proliferation of T and B cells. Clinical interest in the use of MSCs has increased considerably over the past few years, especially because of the ideal characteristics of these cells for regenerative medicine. Therapies with MSCs have shown promising results neurodegenerative diseases, in addition to regulating inflammation, they can promote other beneficial effects, such as neuronal growth, decrease free radicals, and reduce apoptosis. Notwithstanding, despite the vast amount of research into MSCs in neurodegenerative diseases, the mechanism of action of MSCs are still not completely clarified, hindering the development of effective treatments. Conversely, studies in models of psychiatric disorders are scarce, despite the promising results of MSCs therapies in this field as well.