Mesenchymal stem cells have generated great interest among researchers and physicians due to their unique biological characteristics and potential clinical applications. Here, I propose for the first time the concept of a hierarchical system which is composed of all mesenchymal stem cells from post-embryonic subtotipotent stem cells to MSC progenitors. Post-embryonic subtotipotent stem cells are left-over cells during embryonic development and are on the top of the hierarchy. MSC system is a combination of cells that are derived from different stages of embryonic development, possess different differentiation potential and ultimately give rise to cells that share a similar set of phenotypic markers. The concept of MSC system has important implications: (1) it entirely explains the three important biological characteristics of MSC: stem cell properties of MSC, MSC as components of tissue microenvironment and immunomodulatory functions of MSC. (2) It balances immune responses and tissue metabolism. (3) It could provide tissue-specific stem cells for clinical application with high efficiency and safety. In a word, this concept constitutes an important part of the biological properties of MSC and will help researchers gain better insight into MSC.