Mesenchymal stem cells (MSCs) show considerable promise as a cellular immunotherapy for the treatment of a number of autoimmune and inflammatory disorders. However, the precise physiologically and therapeutically relevant mechanism(s) by which MSCs mediate immune modulation remains elusive. Dental pulp stem cells are a readily available source of MSCs that have been reported to show similar immune modulation in vitro as bone marrow MSCs. To test their potential in vivo, we used a clinically relevant humanized mouse model of GvHD in which only human T cells engraft. In this model, we found no effects on either T-cell proliferation, T-cell phenotype or disease progression. To determine if this lack of efficacy was related to a failure of engraftment or persistence of the cells, we used viability dependent radioactive cell tracking and showed that no cells were detectable after 24-h postinjection. Given the apparent failure of MSC to survive following intravenous injection, we hypothesized that their apoptosis may account for the widely reported therapeutic effect in numerous experimental models in vivo. To address this, we employed a well-established model of allergic airway inflammation to compare the efficacy of live and apoptotic MSCs in a fully immunocompetent model. In this model, both live and apoptotic dental pulp MSCs induced a robust immune suppressive reaction that was substantially greater with apoptotic cells. We propose that the mechanism of immune modulation following systemic application of MSCs is a result of cell entrapment and apoptosis occurring in the lungs.