Parkinson's disease (PD) is a common, progressive neurodegenerative disorder caused by the loss of dopaminergic neurons in the substantia nigra (SN). Numerous studies have provided evidence suggesting that neuroinflammation plays an important role in the pathogenesis of PD. In this study, we used lipopolysaccharide (LPS)-induced in vitro and in vivo inflammation models to investigate whether human mesenchymal stem cells (hMSCs) have a protective effect on the dopaminergic system through anti-inflammatory mechanisms. The hMSC treatment significantly decreased LPS-induced microglial activation, tumor necrosis factor (TNF)-α, inducible nitric oxide synthase (iNOS) mRNA expression, and production of NO and TNF-α compared with the LPS-only treatment group. In co-cultures of microglia and mesencephalic dopaminergic neurons, hMSC treatment significantly decreased the loss of tyrosine hydroxylase-immunopositive (TH-ip) cells. The hMSC treatment in rats showed that TH-ip neuronal loss induced by LPS stimulation in the SN was considerably decreased and was clearly accompanied by a decrease in activation of microglia, as well as TNF-α and iNOS mRNA expression and production of TNF-α. These data suggest that hMSCs have a neuroprotective effect on dopaminergic neurons through anti-inflammatory actions mediated by the modulation of microglial activation. Along with various trophic effects and trans-differentiational potency, the anti-inflammatory properties of MSCs could have major therapeutic implications in the treatment of PD. © 2008 Wiley-Liss, Inc.