Stem cells from human exfoliated deciduous teeth (SHED) are one category of dental stem cells. They belong to ectodermal mesenchymal stem cells. As an ideal stem cell source, SHED possess great potential in stem cell therapy. This review demonstrates the biological characteristics and advantages of SHED in stem cell therapy and discusses its multiple functions in tissue regeneration and repair, including multiple differentiation potentiality, cell secretion of cytokines, and immunomodulatory ability. Furthermore, this article introduces the main findings regarding the potential clinical applications of SHED to a variety of diseases. This article demonstrates research progress in dentin-pulp regeneration, maxillofacial bone regeneration, and treatment of nervous system and immune system diseases with SHED for stem cell transplantation.