Acute respiratory distress syndrome (ARDS) is driven by a severe pro-inflammatory response resulting in lung damage, impaired gas exchange and severe respiratory failure. There is no specific treatment that effectively improves outcome in ARDS. However, in recent years, cell therapy has shown great promise in preclinical ARDS studies. A wide range of cells have been identified as potential candidates for use, among these are mesenchymal stromal cells (MSCs), which are adult multi-lineage cells that can modulate the immune response and enhance repair of damaged tissue. The therapeutic potential of MSC therapy for sepsis and ARDS has been demonstrated in multiple in vivo models. The therapeutic effect of these cells seems to be due to two different mechanisms; direct cellular interaction, and paracrine release of different soluble products such as extracellular vesicles (EVs)/exosomes. Different approaches have also been studied to enhance the therapeutic effect of these cells, such as the over-expression of anti-inflammatory or pro-reparative molecules. Several clinical trials (phase I and II) have already shown safety of MSCs in ARDS and other diseases. However, several translational issues still need to be addressed, such as the large-scale production of cells, and their potentiality and variability, before the therapeutic potential of stem cells therapies can be realized.