Abstract The paracrine signaling, immunogenic properties and possible applications of mesenchymal stromal cells (MSCs) for cartilage tissue engineering and regenerative medicine therapies have been investigated through numerous in vitro, animal model and clinical studies. The emerging knowledge largely supports the concept of MSCs as signaling and modulatory cells, exerting their influence through trophic and immune mediation rather than as a cell replacement therapy. The virtues of allogeneic cells as a ready-to-use product with well-defined characteristics of cell surface marker expression, proliferative ability, and differentiation capacity are well established. With clinical applications in mind, a greater focus on allogeneic cell sources is evident, and this review summarizes the latest published and upcoming clinical trials focused on cartilage regeneration adopting allogeneic and autologous cell sources. Moreover, we review the current understanding of immune modulatory mechanisms and the role of trophic factors in articular chondrocyte-MSC interactions that offer feasible targets for evaluating MSC activity in vivo within the intra-articular environment. Furthermore, bringing labeling and tracking techniques to the clinical setting, while inherently challenging, will be extremely informative as clinicians and researchers seek to bolster the case for the safety and efficacy of allogeneic MSCs. We therefore review multiple promising approaches for cell tracking and labeling, including both chimerism studies and imaging-based techniques, that have been widely explored in vitro and in animal models. Understanding the distribution and persistence of transplanted MSCs is necessary to fully realize their potential in cartilage regeneration techniques and tissue engineering applications.