Mesenchymal stem cells (MSCs) are a heterogeneous group of progenitor cells that play a multifunctional role including tissue regeneration, self-renewal properties, and differentiate into cells of mesodermal lineage such as adipocytes, osteoblasts, and chondrocytes. MSCs come into contact with tumor microenvironment (TME) and differentiate into tumor-associated MSCs (TA-MSCs). Various substances such as chemokines, cytokines, growth factors, and others are released by tumor cells to recruit MSCs. TA-MSCs induced epithelial-mesenchymal transition (EMT) program which mediates tumor growth progression, migration, and invasion. Role of MSCs in the tumor progression, stemness, malignancy, and treatment resistance in the breast cancer TME. Immunomodulation by MSCs is mediated by a combination of cell contact-dependent mechanisms and soluble substances. Monocytes/macrophages, dendritic cells, T cells, B cells, and NK cells all show signs of MSCs' immunomodulatory capability. In a complicated interplay initiated by MSCs, anti-inflammatory monocytes/macrophages and regulatory T cells (Tregs) play a key role, as they unveil their full immunomodulatory potential. MSC- secreted cytokines are commonly blamed for the interaction between MSCs, monocytes, and Tregs. Here, we review the current knowledge of cellular and molecular mechanisms involved in MSC-mediated immunomodulation and focus on the role MSCs play in breast cancer progression and its TME.Abbreviation MSC: Mesenchymal Stem Cells; TME: Tumor Microenvironment; TAMS; Tumour-associated Macrophages; ECM: Extracellular matrix; CAFs: Cancer-associated Fibroblasts; CFUs: Colony-forming unit Fibroblasts; Tregs: T regulatory cells; Bregs; Regulatory B cells; IFN-γ: Interferon-gamma; TNF-α: Tumour Necrosis Factor-alpha; IL: Interleukin; TGF-β: transforming growth factorβ; PGE2: Prostaglandin E2; CXCR: Chemokine Receptor; Blimp-1; B lymphocyte-induced maturation protein-1; CCL: Chemokine motif ligand; EMT: Epithelial-mesenchymal transition.