Adult mesenchymal stem cells possess a remarkably diverse array of immunosuppressive characteristics. The capacity to suppress the regular processes of allogeneic rejection, have allowed the use of tissue mismatched cells as therapeutic approaches in regenerative medicine and as agents of immune deviation. This review describes recent advances in understanding the mechanistic basis of mesenchymal stromal or stem cells (MSC) interaction with innate immunity. Particular emphasis is placed on the effect of Toll-like receptor signalling on MSC and a hypothesis that innate immune signals induce a 'licensing switch' in MSC is put forward. The mechanisms underlying MSC suppression of T cell responses and induction of regulatory populations are surveyed. Conflicting data regarding the influence of MSC on B cell function are outlined and discussed. Finally the limits to MSC mediated immune modulation are discussed with reference to the future clinical application of novel cell therapies. J. Cell. Biochem. 112: 1963-1968, 2011. ß 2011 KEY WORDS: MESENCHYMAL STEM CELLS; IMMUNOLOGY; CELL THERAPY C ell-based therapies to treat human disease are set to become clinical reality. To the fore of these novel approaches is the use of adult mesenchymal stromal or stem cells (MSC). The term 'mesenchymal stem cell' was coined by Caplan in 1991 [Caplan, 1991] to describe the rare population of bone marrow derived, plastic adherent cells discovered by Friedenstein and Petrokova [1966]. Originally these stromal cells were assumed to directly repair degenerative disease by differentiation; however, it is now appreciated that MSC also release soluble factors that act in a paracrine manner to promote repair [Caplan, 2009]. However, while MSC might be considered as trophic agents that guide the processes of tissue repair, the nature of the trophic activities remain ill defined.The beneficial actions of MSC encompass anti-apoptotic, cytoprotective effects and the promotion of angiogenesis [Caplan, 2009] and it is the multifactorial, coordinated and targeted features of MSC that make the cell therapy approach superior to small molecule modalities. Angiogenic action is likely to be an important component of tissue repair; pericyte mediated vascular stability contributes to wound healing and tissue resident MSC may be derived from a perivascular precursor [Bianco et al., 2010], and may be intimately involved in neovascularisation of wounds and therefore regeneration.Whilst the above features are important attributes of MSC biology, one trophic function has become the subject of intense scrutiny in the last 7 years. It is now apparent that MSC are powerful modulators of the mammalian immune response. These findings date back to studies which demonstrated that tissue mismatched (allogeneic) and even species mismatched (xenogeneic) MSC were effective cell therapies [Bartholomew et al., 2002;Grinnemo et al., 2004]. The implications were that MSC would disobey the regular rules of tissue transplantation and enjoy a degree of immune privilege,...