The mechanisms by which mesenchymal stromal cells (MSCs) induce immunomodulation are still poorly understood. In the current work, we show by a combination of polymerase chain reaction (PCR) array, flow cytometry, and multiplex cytokine data analysis that during the inhibition of an alloantigen-driven CD4+ T-cell response, MSCs induce a fraction of CD4+ T-cells to coexpress interferon-γ (IFNγ) and interleukin-10 (IL-10). This CD4+ IFNγ+ IL-10+ cell population shares properties with recently described T-cells originating from switched Th1 cells that start producing IL-10 and acquire a regulatory function. Here we report that IL-10-producing Th1 cells accumulated with time during T-cell stimulation in the presence of MSCs. Moreover, MSCs caused stimulated T-cells to downregulate the IFNγ receptor (IFNγR) without affecting IL-10 receptor expression. Further, the inhibitory effect of MSCs could be reversed by an anti-IFNγR-blocking antibody, indicating that IFNγ is one of the major players in MSC-induced T-cell suppression. Stimulated (and, to a lesser extent, resting) CD4+ T-cells treated with MSCs were able to inhibit the proliferation of autologous CD4+ T-cells, demonstrating their acquired regulatory properties. Altogether, our results suggest that the generation of IL-10-producing Th1 cells is one of the mechanisms by which MSCs can downmodulate an immune response.