This study was conducted to characterize canine bone marrow‐derived mesenchymal stem cells (BMSCs); in vivo tracking in mice, and therapeutic evaluation in canine clinical paraplegia cases. Canine BMSCs were isolated, cultured, and characterized in vitro as per International Society for Cellular Therapy criteria, and successfully differentiated to chondrogenic, osteogenic, and adipogenic lineages. To demonstrate the homing property, the pGL4.51 vector that contained luciferase reporter gene was used to transfect BMSCs. Successfully transfected cells were injected around the skin wound in mice and in vivo imaging was done at 6, 12 and 24 hr post MSCs delivery. In vivo imaging revealed that transfected BMSCs migrated and concentrated predominantly toward the center of the wound. BMSCs were further evaluated for allogenic therapeutic potential in 44 clinical cases of spinal cord injuries (SCI) and compared with conventional therapy (control). Therapeutic potential as evaluated by different body reflexes and recovery score depicted significantly better results in stem cell‐treated group compared to control group. In conclusion, allogenic canine BMSCs can serve as potent therapeutic candidate in cell‐based therapies, especially for diseases like SCI, where the conventional medication is not so promising. Canine bone marrow‐derived mesenchymal stem cells (BMSCs) successfully tracked in excision wounds. MSCs can be used allogenically for regenerative medicine. MSCs found very effective for nerve injury cases which are otherwise difficult to treat.