Osteoarthritis is a chronic degenerative disease characterized by cartilage degeneration and subchondral bone changes, and its prevalence has increased rapidly along with the aging of the population. There is still no drug or surgical treatment that completely resolves osteoarthritis. With the advent of cell therapy, the unique advantages of stem cells have been gradually uncovered, and their use in the treatment of osteoarthritis is increasingly studied. In this article, we review the mechanisms by which stem cells repair osteoarthritis. We describe the properties and function of mesenchymal stem cells and their therapeutic mechanisms of action in osteoarthritis in animal models and in the clinic setting.