Acute respiratory distress syndrome (ARDS) is the main cause for the COVID-19 infection-related morbidity and mortality. Recent clinical evidences suggest increased level of cytokines and chemokines targeting lung tissue as a prominent etiological factor. The immunomodulatory effect of mesenchymal stem cells (MSCs) as the alternative therapy for the treatment of inflammatory and autoimmune diseases is well known. Several studies have also revealed that similar therapeutic impacts of parent MSCs are also exhibited by MSCs-derived extracellular vesicles (EVs) including exosomes. In this review, we explored the therapeutic potential of both MSCs and exosomes in mitigating the COVID-19 induced cytokine storm as well as promoting the regeneration of alveolar tissue, attributed to the intrinsic cytokines and growth factor present in the secretome. The preliminary studies have demonstrated the safety and efficacy of MSCs and exosomes in mitigating symptoms associated with COVID-19. Thus, they can be used on compassionate basis, owing to their ability to endogenously repair and decrease the inflammatory reactions involved in the morbidity and mortality of COVID-19. However, more preclinical and clinical studies are warranted to understand their mechanism of action and further establish their safety and efficacy.