The clinical use of stem cells to prevent tissue injury or reconstruct damaged organs is constrained by different ethical and biological issues. Whereas the use of adult stem cells isolated from differentiated tissues is advantageous from the ethical point of view, the immune response of a host to implants of either embryonic or adult stem cells remains a critical problem. Embryonic stem cells can be rejected by an immunocompetent recipient as well as some types of adult stem cells. There is, however, a population of adult stem cells able to differentiate into the three mesenchymal lineages, osteocytes, chondrocytes, adipocytes that have the additional capacity of modulating the immune response by the activation of disparate mechanisms, among which the generation of antigen-specific CD4(+)CD25(+)FoxP3(+) regulatory T lymphocytes. This short review will focus on the immunological properties of embryonic and adult stem cells are, with particular emphasis on the immunomodulatory function of mesenchymal stem cells and their interactions with regulatory T lymphocytes.