Refractory chronic graft-versus-host disease (cGVHD) is a significant complication resulting from allogeneic hematopoietic stem cell transplantation (HSCT). Mesenchymal stromal cells (MSCs) have shown promise for treating refractory cGVHD, but the favorable effects of MSCs therapy in cGVHD are complex and not fully understood. In this prospective clinical study, 20 of 23 cGVHD patients had a complete response or partial response in a 12-month follow-up study. The most marked improvements in cGVHD symptoms were observed in the skin, oral mucosa and liver. Clinical improvement was accompanied by a significantly increased number of interleukin (IL)-10-producing CD5+ B cells. Importantly, CD5+ B cells from cGVHD patients showed increased IL-10 expression after MSCs treatment, which was associated with reduced inflammatory cytokine production by T cells. Mechanistically, MSCs could promote the survival and proliferation of CD5+ regulatory B cells (Bregs), and indoleamine 2, 3-dioxygenase partially participates in the MSC-mediated effects on Breg cells. Thus, CD5+ Breg cells may have an important role in the process of MSC-induced amelioration of refractory cGVHD and may provide new clues to reveal novel mechanisms of action for MSCs.