Background: Stem cell therapy has attracted much interest in the 21st century, not only because of the controversy surrounding the ethics involving pluripotent stem cells, but their potential for clinical use. Objectives: The present review highlights the stem cells niche, types, identification, and characterization, mechanisms of regeneration by using stem cells, and applications in joint disease remedy. Stem cells could be well differentiated cells with the potential to display different cell types depending on the host niche. Niche is defined as the cellular microenvironment providing support and stimuli to control the properties of stem cells. It consists of signaling molecules, inter-cell contacts and interaction between stem cells and their extracellular matrix neighbors. Stem cells are classified according to their sources into two main types, the embryonic and non-embryonic. Embryonic stem cells are pluripotent and can differentiate into all germ layers. Non-embryonic stem cells can be sub-classified into fetal stem cells and adult stem cells. Cultured cells can be made to differentiate into exclusive lineages by providing selective media components that can be identified by histochemical staining and quantified by quantitative Real-time polymerase chain reaction. Mesenchymal stem cells (MSCs) can be identified based on the expression of specific proteins called surface antigen phenotype of mesenchymal stem cell markers. MSCs secrete a variety of interleukins, several neurotrophic factors, many cytokines, and growth factors. These secreted bioactive factors have both paracrine and autocrine effects, which are anti-fibrotic and anti-apoptotic, as well as enhance angiogenesis. Furthermore, they stimulate mitosis and differentiation of tissue-intrinsic reparative stem cells. Systemic MSC transplantation can engraft to an injured tissue and promote wound healing through differentiation, and proliferation in synergy with hematopoietic stem cells. MSCs have been shown to express a variety of chemokines and chemokine receptors and can home to sites of inflammation by migrating towards injury or inflammatory chemokines and cytokines. MSCs are proven to have immunomodulatory properties that are among the most intriguing aspects of their biology. The immunosuppressive properties of MSCs inhibit the immune response of naive and memory T cells in a mixed lymphocyte culture and induce mitogen. The systemic infusion of MSCs can be used in immunosuppressive therapy of various disorders. MSCs have become an alternative source of cells that can be drawn from several these cells have been used as treatment to repair cartilage defects at early stages sources. Using the MSCs and directing them into chondrogenic differentiation might lead to the formation of higher quality cartilage, which has a great composition of hyaline, adequate structural reorganization and therefore improved biomechanical properties. Conclusion: It can be concluded that stem cells are classified according to their sources into two main types, the embryonic and non-embryonic. Embryonic stem cells are pluripotent and can differentiate into all germ layers. Non-embryonic stem cells can be sub-classified into fetal stem cells and adult stem cells. MSCs secrete bioactive factors that are anti-fibrotic and anti-apoptotic, as well as enhance angiogenesis. The systemic infusion of MSCs can be used in immunosuppressive therapy of various disorders. These cells have been used as treatment to repair cartilage defects at early stages.