Macrophages are crucial drivers of inflammatory corneal neovascularization and thus are potential targets for immunomodulatory therapies. We hypothesized that therapeutic use of cornea-derived mesenchymal stromal cells (cMSCs) may alter the function of macrophages. We found that cMSCs can modulate the phenotype and angiogenic function of macrophages. In vitro, cMSCs induce apoptosis of macrophages while preferentially promoting a distinct CD14 CD16 CD163 CD206 immunophenotype that has significantly reduced angiogenic effects based on in vitro angiogenesis assays. In vivo, application of cMSCs to murine corneas after injury leads to reduced macrophage infiltration and higher expression of CD206 in macrophages. Macrophages cocultured ("educated") by cMSCs express significantly higher levels of anti-angiogenic and anti-inflammatory factors compared with control macrophages. In vivo, injured corneas treated with cMSC-educated macrophages demonstrate significantly less neovascularization compared with corneas treated with control macrophages. Knocking down the expression of pigment epithelial derived factor (PEDF) in cMSCs significantly abrogates its modulating effects on macrophages, as shown by the reduced rate of apoptosis, decreased expression of sFLT-1/PEDF, and increased expression of vascular endothelial growth factor-A in the cocultured macrophages. Similarly, cMSCs isolated from PEDF knockout mice are less effective compared with wild-type cMSCs at inhibiting macrophage infiltration when applied to wild-type corneas after injury. Overall, these results demonstrate that cMSCs therapeutically suppress the angiogenic capacity of macrophages and highlight the role of cMSC secreted PEDF in the modulation of macrophage phenotype and function. Stem Cells 2018;36:775-784.