Background: Corona Virus Disease 2019 (COVID-19) is an acute respiratory infectious disease caused by severe respiratory syndrome coronavirus 2 (SARS-CoV-2). The primary pathogenesis is over-activation of the immune system. SARS-CoV-2 continues to mutate and spread rapidly and no effective treatment options are yet available. Mesenchymal stem cells (MSCs) are known to induce anti-inflammatory macrophages, regulatory T cells and dendritic cells. There are a rapidly increasing number of clinical investigations of cell-based therapy approaches for COVID-19. Objective: To summarize the pathogenic mechanism of SARS-CoV-2, and systematically formulated the immunomodulation of COVID-19 by MSCs and their exosomes, as well as research progress. Method: Searching PubMed, clinicaltrials.gov and Chictr.cn for eligible studies to be published or registered by May 2021. Main keywords and search strategies were as follows: ((Mesenchymal stem cells) OR (MSCs)) AND (COVID-19). Results: MSCs regulate the immune system to prevent cytokine release syndrome (CRS) and to promote endogenous repair by releasing various paracrine factors and exosomes. Conclusions: MSC therapy is thus a promising candidate for COVID-19.