The patho-physiological pattern of acute lung injury is a complex phenomenon. The recent progress in research shows the evidence that the stem cells may exhibit their trans-differentiation in organs including lung. This development in stem cell biology related to acute lung injury has opened a lot of challenges and appreciation related to the development of therapeutic strategies for this disease. It is found that mesenchymal stem cell helps in strengthening the immune response to lessen the effect of this disease. Stem cells present within the organ found to play important role in regenerating the cells. Hence these cells have innumerable strength in curbing this disease. However very little is known about the actual molecular mechanism played by the stem cells and studies are need to be addressed before the knowing the therapeutic potential of stem cells for ALI.