Systemic infusion of bone marrow mesenchymal stem cells (BMMSCs) shows therapeutic benefit for a variety of autoimmune diseases, but the underlying mechanisms are poorly understood. Here we show that in mice systemic infusion of BMMSCs induced transient T-cell apoptosis via the Fas ligand (FasL)-dependent Fas pathway and could ameliorate disease phenotypes in fibrillin-1 mutated systemic sclerosis (SS) and dextran sulfate sodium-induced experimental colitis. FasL−/− BMMSCs did not induce T-cell apoptosis in recipients, and could not ameliorate SS and colitis. Mechanistic analysis revealed that Fas-regulated monocyte chemotactic protein 1 (MCP-1) secretion by BMMSCs recruited T-cells for FasL-mediated apoptosis. The apoptotic T-cells subsequently triggered macrophages to produce high levels of TGFβ which in turn led to the upregulation of Tregs and, ultimately, to immune tolerance. These data therefore demonstrate a previously unrecognized mechanism underlying BMMSC-based immunotherapy involving coupling via Fas/FasL to induce T-cell apoptosis.