The key obstacle to clinical application of human inducible regulatory T cells (iTreg) as an adoptive cell therapy in autoimmune disorders is loss of FOXP3 expression in an inflammatory milieu. Here we report human iTreg co-cultured with bone marrow-derived mesenchymal stromal cells (MSCs) during short-term ex vivo expansion enhances the stability of iTreg FOXP3 expression and suppressive function in vitro and in vivo, and further that a key mechanism of action is MSC mitochondrial (mt) transfer via tunneling nanotubules (TNT). MSC mt transfer is driven by mitochondrial metabolic function (CD39/CD73 signaling) in proliferating iTreg and promotes iTreg expression of FOXP3 stabilizing factors BACH2 and SENP3. These results elucidate cellular and molecular mechanisms underlying human MSC mt transfer to proliferating cells. MSC mt transfer stabilizes FOXP3 expression in iTregs, thereby enhancing and sustaining their suppressive function in inflammatory conditions in vitro and in vivo.