Hypoxic-ischemic encephalopathy (HIE) is a major cause of acute neonatal brain injury and can lead to disabling long-term neurological complications. Treatment for HIE is limited to supportive care and hypothermia within 6 h injury which is reserved for full-term infants. Preclinical studies suggest the potential for cell-based therapies as effective treatments for HIE. Some clinical trials using umbilical cord blood cells, placenta-derived stem cells, mesenchymal stem cells (MSCs), and others have yielded promising results though more studies are needed to optimize protocols and multi-center trials are needed to prove safety and efficacy. To date, the therapeutic effects of most cell-based therapies are hypothesized to stem from the bystander effect of donor cells. Transplantation of stem cells attenuate the aberrant inflammation cascade following HIE and provide a more ideal environment for endogenous neurogenesis and repair. Recently, a subset of MSCs, the multilineage-differentiating stress-enduring (Muse) cells have shown to treat HIE and other models of neurologic diseases by replacing dead or ischemic cells and have reached clinical trials. In this review, we examine the different cell sources used in clinical trials and evaluate the underlying mechanism behind their therapeutic effects. Three databases-PubMed, Web of Science, and ClinicalTrials.gov-were used to review preclinical and clinical experimental treatments for HIE.