The novel pathogenic severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) causes coronavirus disease 2019 (COVID-19). Mesenchymal stem cells (MSCs) are currently utilized in clinics for pulmonary inflammatory diseases, including acute respiratory distress syndrome and acute lung injury. Given that MSCs offer a promising treatment against COVID-19, they are being used against COVID-19 in more than 70 clinical trials with promising findings. Genetically engineered MSCs offer promising therapeutic options in pulmonary diseases. However, their potential has not been explored yet. In this review, we provide perspectives on the functionally modified MSCs that can be developed and harnessed for COVID-19 therapy. Options to manage the SARS-CoV-2 infection and its variants using various bioengineering tools to increase the therapeutic efficacy of MSCs are highlighted.