Knee osteoarthritis is a chronic, indolent disease that will affect an ever increasing number of patients, especially the elderly and the obese. It is characterized by degeneration of the cartilage substance inside the knee which leads to pain, stiffness and tenderness. By some estimations in 2030, only in the United States, this medical condition will burden 67 million people. While conventional treatments like physiotherapy or drugs offer temporary relief of clinical symptoms, restoration of normal cartilage function has been difficult to achieve. Moreover, in severe cases of knee osteoarthritis total knee replacement may be required. Total knee replacements come together with high effort and costs and are not always successful. The aim of this review is to outline the latest advances in stem cell therapy for knee osteoarthritis as well as highlight some of the advantages of stem cell therapy over traditional approaches aimed at restoration of cartilage function in the knee.