Bronchopulmonary dysplasia (BPD) is a chronic lung disease due to impaired pulmonary development and is one of the main causes of respiratory failure in preterm infants. Preterm infants with BPD have significantly higher complication and mortality rates than those without BPD. At present, comprehensive management is the main intervention method for BPD, including reasonable respiratory and circulatory support, appropriate enteral nutrition and parenteral nutrition, application of caffeine/glucocorticoids/surfactants, and out-of-hospital management after discharge. The continuous advances in stem cell medicine in recent years provide new ideas for the treatment of BPD. Various pre-clinical trials have confirmed that stem cell therapy can effectively prevent lung injury and promote lung growth and damage repair. This article performs a comprehensive analysis of the mechanism of mesenchymal stem cells in the treatment of BPD, so as to provide a basis for clinical applications.