This systematic review with a meta-analysis aimed to summarize the current evidence of the effectiveness of mesenchymal stem cell (MSC) treatment for knee osteoarthritis (OA) and to examine whether rehabilitation is an effect modifier of the effect estimate of MSC treatment. A literature search yielded 659 studies, of which 35 studies met the inclusion criteria (n = 2385 patients; mean age: 36.0-74.5 years). The meta-analysis results suggested that MSC treatment through intra-articular injection or arthroscopic implantation significantly improved knee pain (standardized mean difference [SMD]: -1.45, 95% confidence interval [CI]: -1.94, -0.96), self-reported physical function (SMD: 1.50, 95% CI: 1.09, 1.92), and cartilage quality (SMD: -1.99; 95% CI: -3.51, -0.47). However, the MSC treatment efficacy on cartilage volume was limited (SMD: 0.49; 95% CI: -0.19, 1.16). Minor adverse events (knee pain or swelling) were reported with a wide-ranging prevalence of 2-60%; however, no severe adverse events occurred. The evidence for these outcomes was "very low" to "low" according to the Grades of Recommendation, Assessment, Development and Evaluation system because of the poor study design, high risk of bias, large heterogeneity, and wide 95% CI of the effects estimate. Performing rehabilitation was significantly associated with better SMD for self-reported physical function (regression coefficient: 0.881, 95% CI: 0.049, 1.712; P = 0.039). We suggest that more high quality randomized controlled trials with consideration of the potential rehabilitation-driven clinical benefit would be needed to facilitate the foundation of effective MSC treatment and regenerative rehabilitation for patients with knee OA.