Despite the long discrepancy over their definition, heterogeneity, and functions, mesenchymal stem cells (MSCs) have proved to be a key player in tissue repair and homeostasis. Generally, somatic tissue-derived MSCs (st-MSCs) are subject to quality variations related to donated samples and biosafety concern for transmission of potential pathogens from the donors. In contrast, human pluripotent stem cells (hPSCs) are unlimited in supply, clear in the biological background, and convenient for quality control, genetic modification, and scale-up production. We, and others, have shown that hPSCs can differentiate in two dimensions or three dimensions to MSCs (ps-MSCs) via embryonic (mesoderm and neural crest) or extraembryonic (trophoblast) cell types under serum-containing or xeno-free and defined conditions. Compared to st-MSCs, ps-MSCs appear less mature, proliferate faster, express lower levels of inflammatory cytokines, and respond less to traditional protocols for st-MSC differentiation to other cell types, especially adipocytes. Nevertheless, ps-MSCs are capable of immune modulation and treatment of an increasing number of animal disease models via mitochondria transfer, paracrine, exosomes, and direct differentiation, and can be potentially used as a universal and endless therapy for clinical application. This review summarizes the progress on ps-MSCs and discusses perspectives and challenges for their potential translation to the clinic. Stem Cells 2019;37:572–581.