Acute lung injury can be a devastating ailment leading to death in patients of all ages. In preterm neonates, lung injury is unique and unlike what is seen in pediatric and adult populations. The physiology behind the acute lung injury endured in developing lungs and the chronicity of harmful stimuli vastly distinguish how bronchopulmonary dysplasia (BPD), the most common complication of prematurity, settles in as a chronic lung disease with lifetime sequelae. Despite being recognized for over 50 years, BPD continues to puzzle the world of neonatology with a shifting phenotype that parallels improvement in neonatal care. The improved understanding of BPD's far-reaching and long-term consequences on the lung and other organs highlights the need to find effective interventions, making it a priority of neonatal research. In this review, we provide an overview of BPD and its associated consequences. Then, we examine the biological premises for mesenchymal stromal cells as a promising therapy, reviewing current translational efforts, challenges, and future directions toward bringing mesenchymal stromal cell therapy to BPD patients.