Recent evidence indicates that mesenchymal stem cells (MSC) possess immunosuppressive properties both in vitro and in vivo. We previously demonstrated the functional abnormality of bone marrow derived MSC in patients with systemic lupus erythematosus (SLE). In this study, we aimed to investigate whether transplantation of human bone marrow derived MSC affects the autoimmune pathogenesis in MRL/lpr mice. We found that human MSC from healthy donors reduced the proliferation of T lymphocytes from MRL/lpr mice in a dose-dependent fashion. Two weeks after in vivo transfer of MSC, we detected significantly reduced serum levels of anti ds-DNA antibodies and 24 hour proteinuria in MRL/lpr mice as compared with control groups without MSC transplantation. Moreover, flow cytometric analysis revealed markedly reduced number of CD4(+) T cells while increased Th1 subpopulation in MSC group and MSC + CTX group when compared with controls. Histopathological examination showed significantly reduced renal pathology in MSC-treated mice. Immunohistochemical studies further revealed reduced expression of TGF-beta, FN, VEGF and the deposition of complement C3 in renal tissue after MSC and MSC + CTX treatment. Taken together, we have demonstrated that transplantation of human MSC can significantly inhibit the autoimmune progression in MRL/lpr mice.