Bone marrow contains a population of rare progenitor cells capable of differentiating into osteoblasts, chondrocytes, adipocytes, myoblasts, and hematopoiesis-supporting stromal cells. These cells, referred to as mesenchymal progenitor cells (MPCs), can be purified and culture-expanded from animals and humans. Using bone-marrow-conditioned medium combined with basic fibroblast growth factor, we cultured a relatively homogeneous population of MPCs from murine bone marrow, which uniformly expressed stem cell antigen-1, CD29, CD44, c-kit, and CD105, while being negative for expression of CD45, CD31, and CD34. In vitro differentiation assays showed the tripotential differentiation capacities of these cells toward adipogenic, osteogenic, and chondrogenic lineages. Most importantly, immunophenotypic analyses demonstrated that MPCs did not express major histocompatibility complex class II molecules or the T-cell costimulatory molecules CD80 and CD86, consistent with further investigation showing that MPCs failed to elicit a proliferative response from allogeneic lymphocytes. Moreover, when allogeneic or third-party MPCs were added to T cells stimulated by allogeneic lymphocytes or the potent T-cell mitogen concanavalin-A, a significant reduction in T-cell proliferation was observed. In conclusion, our data demonstrate that we successfully isolated and culture-expanded a relatively homogeneous population of MPCs from adult murine bone marrow. Additionally, these primary cells could suppress T-lymphocyte proliferation induced by cellular or nonspecific mitogenic stimuli. This immunoregulatory feature of MPCs strongly implies that they may have potential applications in allograft transplantation.