Mesenchymal stem cells (MSCs) from adult marrow can differentiate in vitro and in vivo into various cell types, such as bone, fat and cartilage. MSCs preferentially home to damaged tissue and may have therapeutic potential. In vitro data suggest that MSCs have low inherent immunogenicity as they induce little, if any, proliferation of allogeneic lymphocytes. Instead, MSCs appear to be immunosuppressive in vitro. They inhibit T-cell proliferation to alloantigens and mitogens and prevent the development of cytotoxic T-cells. In vivo, MSCs prolong skin allograft survival and have several immunomodulatory effects, which are presented and discussed in the present study. Possible clinical applications include therapy-resistant severe acute graft-versus-host disease, tissue repair, treatment of rejection of organ allografts and autoimmune disorders.