This is the first study on the immunologic properties of a clinically relevant population of cells derived from the amnion of human placenta. Unlike other cells from the amnion, these amnion-derived multipotent progenitor cells (AMP cells), from human amnion, grow in serum-free conditions and have never been cultured in the presence of medium containing animal-derived components. This study reports the immunologic characteristics of AMP cells and their roles as immunomodulators. Characterization of AMP cells revealed the presence of major histocompatibility complex (MHC) class I but the lack of class II antigens and absence of co-stimulatory molecules B7-1 and B7-2. The nonclassical human leukocyte antigen (HLA)-G was expressed at low levels on cultured AMP cells. Expression was significantly increased after interferon-gamma (IFN-gamma) treatment. Cultured peripheral blood mononuclear cells did not respond to irradiated AMP cells, indicated by lack of proliferation as measured by standard mixed lymphocyte reaction. Culturing AMP cells with IFN-gamma did not reverse this result and did not upregulate class II expression. The AMP cells were shown to have immunomodulatory capabilities by inhibiting peripheral blood mononuclear cell proliferative responses to mitogen, alloantigen, and recall antigen, but the AMP cells were unable to inhibit preactivated T-cell blast response to growth factor media. This immunomodulatory effect of AMP cells was found to be dependent on cell-to-cell contact.