Cell-cell adhesion mediated by ICAM-1 and VCAM-1 is critical for T cell activation and leukocyte recruitment to the inflammation site and, therefore, plays an important role in evoking effective immune responses. However, we found that ICAM-1 and VCAM-1 were critical for mesenchymal stem cell (MSC)-mediated immunosuppression. When MSCs were cocultured with T cells in the presence of T cell Ag receptor activation, they significantly upregulated the adhesive capability of T cells due to the increased expression of ICAM-1 and VCAM-1. By comparing the immunosuppressive effect of MSCs toward various subtypes of T cells and the expression of these adhesion molecules, we found that the greater expression of ICAM-1 and VCAM-1 by MSCs, the greater the immunosuppressive capacity that they exhibited. Furthermore, ICAM-1 and VCAM-1 were found to be inducible by the concomitant presence of IFN-γ and inflammatory cytokines (TNF-α or IL-1). Finally, MSC-mediated immunosuppression was significantly reversed in vitro and in vivo when the adhesion molecules were genetically deleted or functionally blocked, which corroborated the importance of cell-cell contact in immunosuppression by MSCs. Taken together, these findings reveal a novel function of adhesion molecules in immunoregulation by MSCs and provide new insights for the clinical studies of antiadhesion therapies in various immune disorders. Copyright © 2010 by The American Association of Immunologists, Inc.