Systemic Lupus Erythematosus (SLE) is a multisystem autoimmune disease that, despite the advances in immunosuppressive medical therapies, remains potentially fatal in some patients, especially in treatment-refractory patients. Here we reported that impairment of bone marrow mesenchymal stem cells (BMMSCs) and their associated osteoblastic niche deficiency contribute in part to the pathogenesis of SLE-like disease in MRL/lpr mice. Interestingly, allogenic BMMSC transplantation (MSCT) is capable of reconstructing the bone marrow osteoblastic niche and more effectively reverses multi-organ dysfunction as compared to medical immunosuppression with cyclophosphamide (CTX). At the cellular level, MSCT, not CTX treatment, was capable to induce osteoblastic niche reconstruction, possibly contributing to the recovery of regulatory T cells and re-establishment of the immune homeostasis. Based on the promising clinical outcomes in SLE mice, we treated 4 CTX/glucocorticoid treatment-refractory SLE patients using allogenic MSCT and showed a stable 12-18 months disease remission in all treated patients. The patients benefited an amelioration of disease activity, improvement in serologic markers and renal function. These early evidences suggest that allogenic MSCT may be a feasible and safe salvage therapy in refractory SLE patients.