Mesenchymal stem cells (MSC) have recently received centre stage attention because of their potent immunosuppressive effect which has also been successfully exploited in the clinical setting to treat graft-versus-host disease (GVHD); however, the path to clinical efficacy is hindered by the limited understanding of how MSC work and how best to use their potential. In this issue of the European Journal of Immunology, it is shown, using an animal model, that MSC can treat GVHD only if administered in the presence of active disease and that this requirement is strictly related to the presence of IFN-gamma. Here we summarise the knowledge regarding MSC mediated tolerance and the evidence supporting the notion that MSC must be 'licensed' to exert their effects. We also propose the idea that the instrumental effect of IFN-gamma activity on MSC-mediated immunomodulation relies upon IFN-gamma's ability to gather and retain suppressive and effector cells in the same anatomical compartment.