Multiple sclerosis (MS) is a chronic, autoimmune, inflammatory demyelinating disorder of the central nervous system that leads to permanent neurological deficits. Current MS treatment regimens are insufficient to treat the irreversible neurological disabilities. Tremendous progress in the experimental and clinical applications of cell-based therapies has recognized stem cells as potential candidates for regenerative therapy for many neurodegenerative disorders including MS. Mesenchymal stem cells (MSC) and induced pluripotent stem cell (iPSCs) derived precursor cells can modulate the autoimmune response in the central nervous system (CNS) and promote endogenous remyelination and repair process in animal models. This review highlights studies involving the immunomodulatory and regenerative effects of mesenchymal stem cells and iPSCs derived cells in animal models, and their translation into immunomodulatory and neuroregenerative treatment strategies for MS.