Bone marrow stromal cells [BMSCs; also known as mesenchymal stem cells (MSCs)] effectively suppress inflammatory responses in acute graft-versus-host disease in humans and in a number of disease models in mice. Many of the studies concluded that BMSC-driven immunomodulation is mediated by the suppression of proinflammatory Th1 responses while rebalancing the Th1/Th2 ratio toward Th2. In this study, using a ragweed induced mouse asthma model, we studied if BMSCs could be beneficial in an allergic, Th2-dominant environment. When BMSCs were injected i.v. at the time of the antigen challenge, they protected the animals from the majority of asthma-specific pathological changes, including inhibition of eosinophil infiltration and excess mucus production in the lung, decreased levels of Th2 cytokines (IL-4, IL-5, and IL-13) in bronchial lavage, and lowered serum levels of Th2 immunoglobulins (IgG1 and IgE). To explore the mechanism of the effect we used BMSCs isolated from a variety of knockout mice, performed in vivo blocking of cytokines and studied the effect of asthmatic serum and bronchoalveolar lavage from ragweed challenged animals on the BMSCs in vitro. Our results suggest that IL-4 and/or IL-13 activate the STAT6 pathway in the BMSCs resulting in an increase of their TGF-beta production, which seems to mediate the beneficial effect, either alone, or together with regulatory T cells, some of which might be recruited by the BMSCs. These data suggest that, in addition to focusing on graft-versus-host disease and autoimmune diseases, allergic conditions--specifically therapy resistant asthma--might also be a likely target of the recently discovered cellular therapy approach using BMSCs.