Mesenchymal stem cells (MSCs) have been shown to suppress activation of T cells both in vivo and in vitro. In vivo, this may be a way for the body to maintain homeostasis and inhibit immune activation in distinct compartments, such as the bone marrow and the interface between mother and fetus. MSCs modulate the immune function of the major cell populations involved in alloantigen recognition and elimination, including antigen presenting cells, T cells, and natural killer cells. The molecular mechanism that mediates the immunosuppressive effect of MSCs is not completely understood.