Mesenchymal stem cells (MSCs), which can be obtained from various organs and easily propagated in vitro, are one of the most extensively used types of stem cells and have been shown to be efficacious in a broad set of diseases. The unique and highly desirable properties of MSCs include high migratory capacities toward injured areas, immunomodulatory features, and the natural ability to differentiate into connective tissue phenotypes. These phenotypes include bone and cartilage, and these properties predispose MSCs to be therapeutically useful. In addition, MSCs elicit their therapeutic effects by paracrine actions, in which the metabolism of target tissues is modulated. Genetic engineering methods can greatly amplify these properties and broaden the therapeutic capabilities of MSCs, including transdifferentiation toward diverse cell lineages. However, cell engineering can also affect safety and increase the cost of therapy based on MSCs; thus, the advantages and disadvantages of these procedures should be discussed. In this review, the latest applications of genetic engineering methods for MSCs with regenerative medicine purposes are presented.