Mesenchymal stem cells (MSCs), in addition to their multilineage differentiation, exert immunomodulatory effects on immune cells, even dendritic cells (DCs). However, whether they influence the destiny of full mature DCs (maDCs) remains controversial. Here we report that MSCs vigorously promote proliferation of maDCs, significantly reduce their expression of Ia, CD11c, CD80, CD86, and CD40 while increasing CD11b expression. Interestingly, though these phenotypes clearly suggest their skew to immature status, bacterial lipopolysaccharide (LPS) stimulation could not reverse this trend. Moreover, high endocytosic capacity, low immunogenicity, and strong immunoregulatory function of MSC-treated maDCs (MSC-DCs) were also observed. Furthermore we found that MSCs, partly via cell-cell contact, drive maDCs to differentiate into a novel Jagged-2-dependent regulatory DC population and escape their apoptotic fate. These results further support the role of MSCs in preventing rejection in organ transplantation and treatment of autoimmune disease.