Human UC-MSCs are regarded as an attractive alternative to BM-MSCs for clinical applications due to their easy preparation, higher proliferation and lower immunogenicity. However, the mechanisms underlying immune suppression by UC-MSCs are still unclear. We studied the mechanism of inhibition by UC-MSCs during the differentiation of monocytes into DCs and focused on the specific source and the role of the involved cytokines. We found that UC-MSCs suppressed monocyte differentiation into DCs and instructed monocytes towards other cell types, with clear decreases in the expression of co-stimulatory molecules, in the secretion of inflammatory factors and in allostimulatory capacity. IL6, HGF and IL10 might be involved in this process because they were detected at higher levels in a coculture system. UC-MSCs produce IL-6 and HGF, and neutralization of IL-6 and HGF reversed the suppressive effect of UC-MSCs. IL10 was not produced by UC-MSCs but was exclusively produced by monocytes after exposure to UC-MSCs, IL-6 or HGF. In summary, we found that the UC-MSC-mediated inhibitory effect was dependent on IL6 and HGF secreted by UC-MSCs and that this effect induced monocyte-derived cells to produce IL10, which might indirectly strengthen the suppressive effect of UC-MSCs.