Oral mucosal lamina propria progenitor cells (OMLP-PCs) are a novel, clonally derived PC population of neural crest origin with the potential to differentiate down both mesenchymal and neuronal cell lineages. In this study we aimed to determine the immunological properties of OMLP-PCs and to establish whether they would be suitable candidates for allogeneic tissue engineering and in the treatment of immune-related diseases. OMLP-PCs demonstrated no inherent immunogenicity with insignificant expression of costimulatory molecules (CD40, CD80, CD86, CD154, and CD178) or human leukocyte antigen (HLA) class II. OMLP-PCs required 7 days of stimulation with interferon-γ (IFN-γ) to induce cell surface expression of HLA II. Mixed lymphocyte cultures and mitogen stimulation demonstrated the potent immunosuppressive capability of OMLP-PCs in a contact-independent manner. Complete inhibition of lymphocyte proliferation was seen at doses as low as 0.001% OMLP-PCs to responder lymphocytes, while annexin V staining confirmed that this immunosuppressive effect was not due to the induction of lymphocyte apoptosis. These data demonstrate, for the first time, that OMLP-PC immunomodulation, unlike that for mesenchymal stem cells, occurs via a dose- and HLA II-independent mechanism by the release of immunosuppressive soluble factors and suggests these cells may have wide ranging potential in future immune-related therapies.