Evidence has emerged that mesenchymal stem cells (MSCs) represent a promising cell population for supporting new clinical cellular therapies. Currently, bone marrow represents the main source of MSCs, but their differentiation capacity declines with age. We have identified possible novel multilineage mesenchymal cells from human placenta. In addition to their multilineage differentiation, they have a direct immunosuppressive effect on proliferation of T lymphocytes from human adult peripheral blood (PB) and umbilical cord blood (UCB) in vitro. This immunoregulatory feature strongly implies that they have a potential application in allograft transplantation. Since placenta and UCB can be obtained from the same donor, placenta is an attractive source of MSCs for co-transplantation in conjunction with UCB-derived hematopoietic stem cells to reduce the potential of graft-versus-host disease in recipients. However, the way that they modulate the immune system is unclear. In this investigation, we have addressed the effects of human placental MSCs on various subtypes of UCB-derived and PB-derived T lymphocytes.