Mesenchymal stem cells (MSCs) have potential therapeutic applications for musculoskeletal injuries due to their ability to differentiate into several tissue cell types and modulate immune and inflammatory responses. These immune-modulatory properties were examined in vivo during early stage rat medial collateral ligament healing. Two different cell doses (low dose 1 × 10(6) or high dose 4 × 10(6) MSCs) were administered at the time of injury and compared with normal ligament healing at days 5 and 14 post-injury. At both times, the high dose MSC group demonstrated a significant decrease in M2 macrophages compared to controls. At day 14, fewer M1 macrophages were detected in the low dose group compared to the high dose group. These results, along with significant changes in procollagen I, proliferating cells, and endothelialization suggest that MSCs can alter the cellular response during healing in a dose-dependent manner. The higher dose ligaments also had increased expression of several pro-inflammatory cytokines at day 5 (IL-1β, IFNγ, IL-2) and increased expression of IL-12 at day 14. Mechanical testing at day 14 revealed increased failure strength and stiffness in low dose ligaments compared to controls. Based on these improved mechanical properties, MSCs enhanced functional healing when applied at a lower dose. Different doses of MSCs uniquely affected the cellular response and cytokine expression in healing ligaments. Interestingly, the lower dose of cells proved to be most effective in improving functional properties.