OBJECTIVE To study the effect of human placenta derived mesenchymal stem cells (MSCs) on the immune function of lymphocytes derived from human umbilical cord blood. METHODS Mononucleated cells (MNC) were isolated from human placenta tissue perfusate by density gradient fractionation. Individual colonies were selected and cultured. The culture-expanded cells were characterized by immune phenotyping so as to identify the MSCs. The MSCs were cultured under conditions promoting differentiation to osteoblasts or adipocytes. MNCs were isolated from adult peripheral blood and human umbilical cord blood and cultured, then the adherent cells were excluded and the suspended cells, lymphocytes, were inoculated in the culture fluids of MSCs of different concentrations and phytohemagglutinin (PHA), a nonspecific mitogenic stimulant, was added for 84 hours (MSC + PHA groups), then (3)H-thymidine deoxyribose ((3)H-TdR) was added for 12 hours. The cells were collected and scintillation counter was used to calculate the counts per minute (cpm). Pure lymphocytes without MSC and stimulated by PHA were used as control group (non-MSC Group) and pure lymphocytes and pure MSCs without PHA were used as blank control groups (non-PHA Group). RESULTS From human placenta MSCs were successfully isolated and exhibited fibroblast-like morphology. Flow cytometric analysis showed that the placental MSCs were a homogeneous cell population devoid of hematopoietic cells positive for CD29, CD44, CD73, CD105, CD166, and HLA-ABC positive and negative for CD34, CD45, and HLA-DR. They could be induced into adipocytes or osteocytes. The cpm value of the non-MSC Group was 171 855 +/- 31 454, significantly higher than that of non-PHA Group (26 453 +/- 5268). The cpm values of the different concentrations MSC + PHA groups were all significantly lower than that of non-MSC Group in a dose-dependent manner; when the dose of MSCs was 2 x 10(5) the suppression rate was 79.97% in PB and 64.06% in UCB. CONCLUSIONS MSCs derived from postpartum human placenta, an important and novel source of multipotent stem cells, suppress blood lymphocyte proliferation, thus may be used to reduce graft -versus-host disease (GVHD) in recipients.