Stem cell therapy has revolutionized modern clinical therapy with the potential of stem cells to differentiate into many different cell types which may help to replace different cell lines of an organism. Innumerous trials are carried out to merge new scientific knowledge and techniques with traditional herbal extracts that may result in less toxic, affordable, and highly available natural alternative therapeutics. Currently, mesenchyamal stromal cell (MSC) lines are treated with individual and mixtures of crude herbal extracts, as well as with purified compounds from herbal extracts, to investigate the mechanisms and effects of these on stem cell growth and differentiation. Human MSCs (hMSCs) possess multilineage, i.e., osteogenic, neurogenic, adipogenic, chondrogenic, and myogenic, differentiation abilities. The proliferative and differentiation properties of hMSCs treated with herbal extracts have shown promise in diseases such as osteoporosis, neurodegenerative disorders, and other tissue degenerative disorders. Well characterized herbal extracts that result in increased rates of tissue regeneration may be used in both stem cell therapy and tissue engineering for replacement therapy, where the use of scaffolds and vesicles with enhanced attaching and proliferative properties could be highly advantageous in the latter. Although the clinical application of herbal extracts is still in progress due to the variability and complexity of bioactive constituents, standardized herbal preparations will strengthen their application in the clinical context. We have critically reviewed the proliferative and differentiation effects of individual herbal extracts on hMSCs mainly derived from bone marrow and elaborated on the plausible underlying mechanisms of action. To be fruitfully used in reparative and regenerative therapy, future directions in this area of study should (i) make use of hMSCs derived from different non-traditional sources, including medical waste material (umbilical cord, Wharton's jelly, and placenta), (ii) take account of the vast numbers of herbal extracts used in traditional medicine globally, and (iii) investigate the mechanisms and pathways of their effects on hMSCs.