The therapeutic potential of mesenchymal stem cell (MSC) transplantation for the treatment of ischemic conditions such as coronary artery disease, peripheral arterial disease, and stroke has been explored in animal models and early-phase clinical trials. A substantial database documents the safety profile of MSC administration to humans in a large number of disease states. The mechanism of the therapeutic effect of MSC transplantation in ischemic disease has been postulated to be due to paracrine, immunomodulatory, and differentiation effects. This review provides an overview of the potential role of MSC-based therapy for critical limb ischemia (CLI), the comparison of MSC cellular therapy with angiogenesis gene therapy in CLI, and the proposed mechanism of action of MSC therapy. Preclinical efficacy data in animal models of hindlimb ischemia, current early-phase human trial data, and considerations for future MSC-based therapy in CLI will also be discussed.