BM-derived mesenchymal stromal cells (MSC) differentiate along the mesenchymal lineage to bone, fat and cartilage. In vitro, MSC induce little, if any, proliferation of allogeneic lymphocytes. MSC inhibit the proliferation of activated T cells and the formation of cytotoxic T cells. In vivo, they appear to have anti-inflammatory effects. Preliminary studies suggest that MSC preferentially home to damaged tissue and therefore have therapeutic potential. Possible clinical indications include therapy-resistant severe acute GvHD, treatment of rejection of organ allografts and autoimmune disorders.