A method of reducing an immune response to a transplant in a recipient by treating said recipient with an amount of mesenchymal stem cells effective to reduce or inhibit host rejection of the transplant. The mesenchymal stem cells can be administered before, at the same time as, or after the transplant. Also disclosed is a method of inducing a reduced immune response against a host by foreign tissue, i.e., graft versus host disease, by treatment with mesenchymal stem cells.
