Aside from the well-established self-renewal and multipotent differentiation properties, mesenchymal stem cells exhibit both immunomodulatory and anti-inflammatory roles in several experimental autoimmune and inflammatory diseases. In this study, we isolated a new population of stem cells from human gingiva, a tissue source easily accessible from the oral cavity, namely, gingiva-derived mesenchymal stem cells (GMSCs), which exhibited clonogenicity, self-renewal, and multipotent differentiation capacities. Most importantly, GMSCs were capable of immunomodulatory functions, specifically suppressed peripheral blood lymphocyte proliferation, induced expression of a wide panel of immunosuppressive factors including IL-10, IDO, inducible NO synthase (iNOS), and cyclooxygenase 2 (COX-2) in response to the inflammatory cytokine, IFN-γ. Cell-based therapy using systemic infusion of GMSCs in experimental colitis significantly ameliorated both clinical and histopathological severity of the colonic inflammation, restored the injured gastrointestinal mucosal tissues, reversed diarrhea and weight loss, and suppressed the overall disease activity in mice. The therapeutic effect of GMSCs was mediated, in part, by the suppression of inflammatory infiltrates and inflammatory cytokines/mediators and the increased infiltration of regulatory T cells and the expression of anti-inflammatory cytokine IL-10 at the colonic sites. Taken together, GMSCs can function as an immunomodulatory and anti-inflammatory component of the immune system in vivo and is a promising cell source for cell-based treatment in experimental inflammatory diseases. Copyright © 2009 by The American Association of Immunologists, Inc.