Approximately 18:1 × 106 new cases of cancer were recorded globally in 2018, out of which 9.6 million died. It is known that people who have Inflammatory Bowel Disease (IBD) turn to be prone to increased risks of developing colorectal cancer (CRC), which has global incident and mortality rates of 10.2% and 9.2%, respectively. Over the years, conventional treatments of IBD and its associated CRC have been noted to provide scarce desired results and often with severe complications. The introduction of biological agents as a better therapeutic approach has witnessed a great deal of success in both experimental and clinical models. With regard to mesenchymal stem cell (MSC) therapy, the ability of these cells to actively proliferate, undergo plastic differentiation, trigger strong immune regulation, exhibit low immunogenicity, and express abundant trophic factors has ensured their success in regenerative medicine and immune intervention therapies. Notwithstanding, MSC-based therapy is still confronted with some challenges including the likelihood of promoting tumor growth and metastasis, and possible overestimated therapeutic potentials. We review the success story of MSC-based therapy in IBD and its associated CRC as documented in experimental models and clinical trials, examining some of the challenges encountered and possible ways forward to producing an optimum MSC therapeutic imparts.