Mesenchymal stem/progenitor cells (MSCs) were reported to enhance the survival of cellular and organ transplants. However, their mode of action was not established. We here used a mouse model of corneal allotransplantation and demonstrated that peri-transplant intravenous (i.v.) infusion of human MSCs (hMSCs) decreased the early surgically induced inflammation and reduced the activation of antigen-presenting cells (APCs) in the cornea and draining lymph nodes (DLNs). Subsequently, immune rejection was decreased, and allograft survival was prolonged. Quantitative assays for human GAPDH revealed that <10 hMSCs out of 1 × 10(6) injected cells were recovered in the cornea 10 hours to 28 days after i.v. infusion. Most of hMSCs were trapped in lungs where they were activated to increase expression of the gene for a multifunctional anti-inflammatory protein tumor necrosis factor-α stimulated gene/protein 6 (TSG-6). i.v. hMSCs with a knockdown of TSG-6 did not suppress the early inflammation and failed to prolong the allograft survival. Also, i.v. infusion of recombinant TSG-6 reproduced the effects of hMSCs. Results suggest that hMSCs improve the survival of corneal allografts without engraftment and primarily by secreting TSG-6 that acts by aborting early inflammatory responses. The same mechanism may explain previous reports that MSCs decrease rejection of other organ transplants.