Current advances in stem cell research and innovative biological approaches in the field of tissue engineering and regenerative medicine could eventually translate into prospective clinical applications. Various adult organs and tissues harbor stem and progenitor cells that could potentially be used to repair, regenerate, and restore a variety of different tissues following acute injury or tissue destructive diseases. Skeletal muscle is a very convenient and plentiful source of somatic stem cells. It contains several distinct populations of myogenic stem cells including satellite cells that are mainly responsible for muscle growth and regeneration, and multipotent muscle-derived stem cells (MDSCs). Although both cell populations share some phenotypic similarities, MDSCs display a much greater differentiation potential in vitro and are capable of regenerating various tissues in vivo. Furthermore, these cells not only participate in the regeneration process by differentiating into tissue-specific cell types, but also promote endogenous tissue repair by secreting a multitude of trophic factors. In this article, we describe the biological aspects of MDSC isolation and characterization and provide an overview of potential therapeutic application of these cells for the treatment of cardiac and skeletal muscle injuries and diseases, urological dysfunction, and bone and cartilage defects. We also discuss major challenges and limitations currently faced by MDSC-based therapies that await resolution before these techniques can be applied clinically.