Locally applied mesenchymal stromal cells (MSCs) have the capacity to promote the healing of perianal fistulas in Crohn's disease (CD) and are under clinical development for the treatment of proctitis in ulcerative colitis (UC). Despite these clinical advances, the mechanism of action of local MSC therapy in inflammatory bowel disease (IBD) is largely unknown. We hypothesized that the local cytokine environment in IBD patients affects the immunomodulatory properties of MSCs. To evaluate this, 11 cytokines were analyzed in inflamed tissues obtained from CD and UC patients. Based on the identified cytokine profiles 4 distinct cytokine mixtures that mimic various inflammatory IBD environments were established. Next, MSCs were cultured in the presence of either of these 4 cytokine mixtures after which the expression of immunomodulatory and tissue regenerative molecules and the capacity of MSCs to modulate T-cell proliferation and dendritic cell (DC) differentiation were assessed. Our data show that MSCs respond, in a cytokine-specific manner, by upregulation of immunomodulatory and tissue regenerative molecules, including cyclooxygenase-2, indoleamine 2,3-dioxygenase, and transforming growth factor-β1. Functional studies indicate that MSCs exposed to a cytokine profile mimicking one of the 2 UC cytokine milieus were less effective in inhibition of DC differentiation. In conclusion, our data indicate that cytokine mixes mimicking the local cytokine milieus of inflamed UC colonic or CD fistulas tissues can differentially affect the immunomodulatory and tissue regenerative characteristics of MSCs. These data support the hypothesis that the local intestinal cytokine milieu serves as a critical factor in the efficacy of local MSC treatment.