Bone marrow-derived mesenchymal stem cells (MSCs) hold great promise for treating immune disorders because of their immunoregulatory capacity, but the mechanism remains controversial. As we show here, the mechanism of MSC-mediated immunosuppression varies among different species. Immunosuppression by human- or monkey-derived MSCs is mediated by indoleamine 2,3-dioxygenase (IDO), whereas mouse MSCs utilize nitric oxide, under the same culture conditions. When the expression of IDO and inducible nitric oxide synthase (iNOS) were examined in human and mouse MSCs after stimulation with their respective inflammatory cytokines, we found that human MSCs expressed extremely high levels of IDO, and very low levels of iNOS, whereas mouse MSCs expressed abundant iNOS and very little IDO. Immunosuppression by human MSCs was not intrinsic, but was induced by inflammatory cytokines and was chemokine-dependent, as it is in mouse. These findings provide critical information about the immunosuppression of MSCs and for better application of MSCs in treating immune disorders.