Mesenchymal stem cells (MSCs) are multipotent adult stem cells that have regenerative capability and exert paracrine actions on damaged tissues. Since peritoneal fibrosis is a serious complication of peritoneal dialysis, we tested whether MSCs suppress this using a chlorhexidine gluconate model in rats. Although MSCs isolated from green fluorescent protein-positive rats were detected for only 3 days following their injection, immunohistochemical staining showed that MSCs suppressed the expression of mesenchymal cells, their effects on the deposition of extracellular matrix proteins, and the infiltration of macrophages for 14 days. Moreover, MSCs reduced the functional impairment of the peritoneal membrane. Cocultures of MSCs and human peritoneal mesothelial cells using a Transwell system indicated that the beneficial effects of MSCs on the glucose-induced upregulation of transforming growth factor-β1(TGF-β1) and fibronectin mRNA expression in the human cells were likely due to paracrine actions. Preincubation in MSC-conditioned medium suppressed TGF-β1-induced epithelial-to-mesenchymal transition, α-smooth muscle actin, and the decrease in zonula occludens-1 in cultured human peritoneal mesothelial cells. Although bone morphogenic protein 7 was not detected, MSCs secreted hepatocyte growth factor and a neutralizing antibody to this inhibited TGF-β1 signaling. Thus, our findings imply that MSCs ameliorate experimental peritoneal fibrosis by suppressing inflammation and TGF-β1 signaling in a paracrine manner.