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Mesenchymal stem (stromal) cells (MSCs) are rare, multipotent progenitor cells that can be isolated and expanded from bone marrow and other tissues. Strikingly, MSCs modulate the functions of immune cells, including T cells, B cells, natural killer cells, monocyte/macrophages, dendritic cells, and neutrophils. T cells, activated to perform a range of different effector functions, are the primary mediators of many autoimmune and inflammatory diseases as well as of transplant rejection and graft-versus-host disease. Well-defined T-cell effector phenotypes include the CD4+ (T helper cell) subsets Th1, Th2, and Th17 cells and cytotoxic T lymphocytes derived from antigen-specific activation of naïve CD8+ precursors. In addition, naturally occurring and induced regulatory T cells (Treg) represent CD4+ and CD8+ T-cell phenotypes that potently suppress effector T cells to prevent autoimmunity, maintain self-tolerance, and limit inflammatory tissue injury. Many immune-mediated diseases entail an imbalance between Treg and effector T cells of one or more phenotypes. MSCs broadly suppress T-cell activation and proliferation in vitro via a plethora of soluble and cell contact-dependent mediators. These mediators may act directly upon T cells or indirectly via modulation of antigen-presenting cells and other accessory cells. MSC administration has also been shown to be variably associated with beneficial effects in autoimmune and transplant models as well as in several human clinical trials. In a small number of studies, however, MSC administration has been found to aggravate T cell-mediated tissue injury. The multiple effects of MSCs on cellular immunity may reflect their diverse influences on the different T-cell effector subpopulations and their capacity to specifically protect or induce Treg populations. In this review, we focus on findings from the recent literature in which specific modulatory effects of MSCs on one or more individual effector T-cell subsets and Treg phenotypes have been examined in vitro, in relevant animal models of in vivo immunological disease, and in human subjects. We conclude that MSCs have the potential to directly or indirectly inhibit disease-associated Th1, Th2, and Th17 cells as well as cytotoxic T lymphocytes but that many key questions regarding the potency, specificity, mechanistic basis, and predictable therapeutic value of these modulatory effects remain unanswered.