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Acute ischemic injury and chronic cardiomyopathies damage healthy heart tissue. Dead cells are gradually replaced by a fibrotic scar, which disrupts the normal electromechanical continuum of the ventricular muscle and compromises its pumping capacity. Recent studies in animal models of ischemic cardiomyopathy suggest that transplantation of various stem cell preparations can improve heart recovery after injury. The first clinical trials in patients produced some encouraging results, showing modest benefits. Most of the positive effects are probably because of a favorable paracrine influence of stem cells on the disease microenvironment. Stem cell therapy attenuates inflammation, reduces apoptosis of surrounding cells, induces angiogenesis, and lessens the extent of fibrosis. However, little new heart tissue is formed. The current challenge is to find ways to improve the engraftment, long-term survival and appropriate differentiation of transplanted stem cells within the cardiovascular tissue. Hence, there has been a surge of interest in pluripotent stem cells with robust cardiogenic potential, as well as in the inherent repair and regenerative mechanisms of the heart. Recent discoveries on the biology of adult stem cells could have relevance for cardiac regeneration. Here, we discuss current developments in the field of cardiac repair and regeneration, and present our ideas about the future of stem cell therapy.