Mesenchymal stem cells (MSCs) are considered valuable sources for cell therapy because of their immune regulatory function. Here, we investigated the effects of tonsil-derived MSCs (T-MSCs) on the differentiation, maturation, and function of dendritic cells (DCs). We examined the effect of T-MSCs on differentiation and maturation of bone-marrow- (BM-) derived monocytes into DCs and we found suppressive effect of T-MSCs on DCs via direct contact as well as soluble mediators. Moreover, T cell proliferation, normally increased in the presence of DCs, was inhibited by T-MSCs. Differentiation of CD4(+) T cell subsets by the DC-T cell interaction also was inhibited by T-MSCs. The soluble mediators suppressed by T-MSCs were granulocyte-macrophage colony-stimulating factor (GM-CSF), RANTES, interleukin-6 (IL-6), and monocyte chemoattractant protein-1 (MCP-1). Taken together, T-MSCs exert immune modulatory function via suppression of the differentiation, maturation, and function of BM-derived DCs. Our data suggests that T-MSCs could be used as a novel source of stem cell therapy as immune modulators.