Osteoarthritis (OA) is a debilitating, degenerative joint disease characterized by progressive destruction of articular cartilage. Given the poor repair capacity of articular cartilage and the associated local destructive immune/inflammatory responses involving all joint structures, OA frequently ends up as a "whole joint failure" requiring prosthetic replacement. Current pharmacological efforts, belatedly started, mainly aim at symptomatic pain relief, underscoring the need for novel therapeutic schemes designed to modify the course of the disease. Mesenchymal stem cell (MSC)-based therapy has gained significant interest, sparking the design of multiple trials proving safety while providing promising preliminary efficacy results. MSCs possess 'medicinal signaling cell' properties related to their immunomodulatory and anti-inflammatory effects, which induce the establishment of a pro-regenerative microenvironment at the injured tissue. Those trophic effects are paralleled by the long-established chondroprogenitor capacity that can be harnessed to ex vivo fabricate engineered constructs to repair damaged articular cartilage. The present review focuses on these two aspects of the use of MSCs for articular cartilage damage, namely, cell therapy and tissue engineering, providing information on their use criteria, advancements, challenges and strategies to overcome them.