Mesenchymal stem cells (MSCs) play diverse roles ranging from regeneration and wound healing to immune signaling. Recent investigations have indicated the crucial role of these multipotent stem cells in regulating various aspects of the immune system. MSCs express unique signaling molecules and secrete various soluble factors that play critical roles in modulating and shaping immune responses, and in some other cases, MSCs can also exert direct antimicrobial effects, thereby helping with the eradication of invading organisms. Recently, it has been demonstrated that MSCs are recruited at the periphery of the granuloma containingMycobacterium tuberculosisand exert “Janus”-like functions by harboring pathogens and mediating host protective immune responses. This leads to the establishment of a dynamic balance between the host and the pathogen. MSCs function through various immunomodulatory factors such as nitric oxide (NO), IDO, and immunosuppressive cytokines. Recently, our group has shown thatM.tbuses MSCs as a niche to evade host protective immune surveillance mechanisms and establish dormancy. MSCs also express a large number of ABC efflux pumps; therefore, dormantM.tbresiding in MSCs are exposed to a suboptimal dose of drugs. Therefore, it is highly likely that drug resistance is coupled with dormancy and originates within MSCs. In this review, we discussed various immunomodulatory properties of MSCs, their interactions with important immune cells, and soluble factors. We also discussed the possible roles of MSCs in the outcome of multiple infections and in shaping the immune system, which may provide insight into therapeutic approaches using these cells in different infection models.