Multipotent mesenchymal stromal cells (MSCs) possess reparative and immunoregulatory properties, making them attractive candidates for cellular therapy. However, the majority of MSCs administered i.v. encounter a pulmonary impasse and soon disappear from the lungs, raising the question of how they induce such durable immunosuppressive effects. Using a mouse model of allergic asthma, we show that administration of MSCs isolated from human bone marrow, umbilical cord, or adipose tissue provoked a pronounced increase in alveolar macrophages and inhibited hallmark features of asthma, including airway hyperresponsiveness, eosinophilic accumulation, and Th2 cytokine production. Importantly, selective depletion of this macrophage compartment reversed the therapeutic benefit of MSC treatment on airway hyperresponsiveness. Our data demonstrate that human MSCs exert cross-species immunosuppressive activity, which is mediated by alveolar macrophages in allergic asthma. As alveolar macrophages are the predominant immune effector cells at the air-tissue interface in the lungs, this study provides a compelling mechanism for durable MSC effects in the absence of sustained engraftment.