Cell-based therapies are attractive approaches to promote myelin repair. Recent studies demonstrated a reduction in disease burden in mice with experimental allergic encephalomyelitis (EAE) treated with mouse mesenchymal stem cells (MSCs). Here, we demonstrated human bone marrow-derived MSCs (BM-hMSCs) promote functional recovery in both chronic and relapsing-remitting models of mouse EAE, traced their migration into the injured CNS and assayed their ability to modulate disease progression and the host immune response. Injected BM-hMSCs accumulated in the CNS, reduced the extent of damage and increased oligodendrocyte lineage cells in lesion areas. The increase in oligodendrocytes in lesions may reflect BM-hMSC-induced changes in neural fate determination, since neurospheres from treated animals gave rise to more oligodendrocytes and less astrocytes than nontreated neurospheres. Host immune responses were also influenced by BM-hMSCs. Inflammatory T-cells including interferon gamma producing Th1 cells and IL-17 producing Th17 inflammatory cells and their associated cytokines were reduced along with concomitant increases in IL-4 producing Th2 cells and anti-inflammatory cytokines. Together, these data suggest that the BM-hMSCs represent a viable option for therapeutic approaches. © 2009 Wiley-Liss, Inc.