Mesenchymal stem cells are multipotent cells that can be isolated from adult bone marrow and can be induced in vitro and in vivo to differentiate into a variety of mesenchymal tissues, including bone, cartilage, tendon, fat, bone marrow stroma, and muscle. Despite their potential clinical utility for cellular and gene therapy, the fate of mesenchymal stem cells after systemic administration is mostly unknown. To address this, we transplanted a well-characterized human mesenchymal stem cell population into fetal sheep early in gestation, before and after the expected development of immunologic competence. In this xenogeneic system, human mesenchymal stem cells engrafted and persisted in multiple tissues for as long as 13 months after transplantation. Transplanted human cells underwent site-specific differentiation into chondrocytes, adipocytes, myocytes and cardiomyocytes, bone marrow stromal cells and thymic stroma. Unexpectedly, there was long-term engraftment even when cells were transplanted after the expected development of immunocompetence. Thus, mesenchymal stem cells maintain their multipotential capacity after transplantation, and seem to have unique immunologic characteristics that allow persistence in a xenogeneic environment. Our data support the possibility of the transplantability of mesenchymal stem cells and their potential utility in tissue engineering, and cellular and gene therapy applications.