Mesenchymal stromal cells derived from amnion (AM-MSCs) can be easily obtained in large quantity by less invasive method in comparison to bone marrow-derived MSCs (BM-MSCs). However, the biological and immunosuppressive properties of AM-MSCs are still poorly characterized. Previous studies demonstrated that BM-MSCs expressed indoleamine 2,3-dioxygenase (IDO) to suppress T-cell responses. This study was designed to address whether IDO contributes to the immunosuppressive function of AM-MSCs. MSCs isolated from amnion were cultured in complete medium similar to BM-MSCs. After culture, AM-MSCs exhibited spindle shape morphology and expressed MSC markers similar to that of BM-MSCs. In addition, AM-MSCs were able to differentiate into adipocytes and osteoblasts. Fascinatingly, AM-MSCs and BM-MSCs exhibited comparable degree of immunosuppressive effect when they were co-cultured with activated T-cells. In addition, IDO secreted by AM-MSCs was responsible for induction of immunosuppressive activities in the same manner as BM-MSCs. Taken together; the results of the present study demonstrate that while AM-MSCs and BM-MSCs show similar immunosuppressive effect, AM-MSCs may have additional advantage over the BM-MSCs in terms of availability. Therefore, AM-MSCs might be considered a potential source for therapeutic applications especially for treatment of immune related diseases.