Multipotent mesenchymal stem cells (MSCs) are promising candidates for regenerative cell-based therapy. The mechanisms underlying MSC differentiation and other functions relevant to therapeutic avenues remain however a matter of debate. Recent reports imply a critical role for intercellular contacts in MSC differentiation. We studied MSC differentiation to vascular smooth muscle cells (VSMCs) in a coculture model using human primary MSCs and VSMCs. We observed that under these conditions, MSCs did not undergo the expected differentiation process. Instead, they revealed an increased proliferation rate. The upregulated MSC proliferation was initiated by direct contacts of MSCs with VSMCs; indirect coculture of both cell types in transwells was ineffective. Intercellular contacts affected cell growth in a unidirectional fashion, since VSMC proliferation was not changed. We observed formation of so-called tunneling nanotubes (TNTs) between MSCs and VSMCs that revealed an intercellular exchange of a fluorescent cell tracker dye. Disruption of TNTs using cytochalasin D or latrunculin B abolished increased proliferation of MSCs initiated by contacts with VSMCs. Using specific fluorescent markers, we identified exchange of mitochondria via TNTs. By generation of VSMCs with mitochondrial dysfunction, we show that mitochondrial transfer from VSMCs to MSCs was required to regulate MSC proliferation in coculture. Our data suggest that MSC interaction with other cell types does not necessarily result in the differentiation process, but rather may initiate a proliferative response. They further point to complex machinery of intercellular communications at the place of vascular injury and to an unrecognized role of mitochondria in these processes.