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Bronchopulmonary dysplasia (BPD) is a chronic lung disease commonly seen in preterm infants, and is triggered by infection, mechanical ventilation, and oxygen toxicity. Among other problems, lifelong limitations in lung function and impaired psychomotor development may result. Despite major advances in understanding the disease pathologies, successful interventions are still limited to only a few drug therapies with a restricted therapeutic benefit, and which sometimes have significant side effects. As a more promising therapeutic option, mesenchymal stem cells (MSCs) have been in focus for several years due to their anti-inflammatory effects and their secretion of growth and development promoting factors. Preclinical studies provide evidence in that MSCs have the potential to contribute to the repair of lung injuries. This review provides an overview of MSCs, and other stem/progenitor cells present in the lung, their identifying characteristics, and their differentiation potential, including cytokine/growth factor involvement. Furthermore, animal studies and clinical trials using stem cells or their secretome are reviewed. To bring MSC-based therapeutic options further to clinical use, standardized protocols are needed, and upcoming side effects must be critically evaluated. To fill these gaps of knowledge, the MSCs' behavior and the effects of their secretome have to be examined in more (pre-) clinical studies, from which only few have been designed to date.