Mesenchymal stem cells derived from the chorionic villi of human term placenta (pMSCs) have drawn considerable interest because of their multipotent differentiation potential and their immunomodulatory capacity. These properties are the foundation for their clinical application in the fields of stem cell transplantation and regenerative medicine. Previously, we showed that pMSCs induce an anti-inflammatory phenotype in human macrophages. In this study, we determined whether pMSCs modify the differentiation and maturation of human monocytes into dendritic cells (DCs). The consequences on dendritic function and on T cell proliferation were also investigated. Interleukin-4 (IL-4) and granulocyte-macrophage colony stimulating factor (GM-CSF) were used to stimulate the differentiation of monocytes into immature dendritic cells (iDCs), which were subsequently co-cultured with pMSCs. Lipopolysaccharide (LPS) was used to induce maturation of iDCs into mature dendritic cells (mDCs). Flow cytometry and enzyme-linked immunosorbent assays (ELISA) were used to quantify the effect pMSC co-culturing on DC differentiation using CD1a, a distinctive marker of DCs, as well as other molecules important in the immune functions of DCs. The phagocytic activity of iDCs co-cultured with pMSCs, and the effects of iDCs and mDC stimulation on T cell proliferation, were also investigated. Monocyte differentiation into iDCs was inhibited when co-cultured with pMSCs and maturation of iDCs by LPS treatment was also prevented in the presence of pMSCs as demonstrated by reduced expression of CD1a and CD83, respectively. The inhibitory effect of pMSCs on iDC differentiation was dose dependent. In addition, pMSC co-culture with iDCs and mDCs resulted in both phenotypic and functional changes as shown by reduced expression of costimulatory molecules (CD40, CD80, CD83 and CD86) and reduced capacity to stimulate CD4(+) T cell proliferation. In addition, pMSC co-culture increased the surface expression of major histocompatibility complex (MHC-II) molecules on iDCs but decreased MHC-II expression on mDCs. Moreover, pMSC co-culture with iDCs or mDCs increased the expression of immunosuppressive molecules [B7H3, B7H4, CD273, CD274 and indoleamine-pyrrole 2,3-dioxygenase (IDO). Additionally, the secretion of IL-12 and IL-23 by iDCs and mDCs co-cultured with pMSCs was decreased. Furthermore, pMSC co-culture with mDCs decreased the secretion of IL-12 and INF-γ whilst increasing the secretion of IL-10 in a T cell proliferation experiment. Finally, pMSC co-culture with iDCs induced the phagocytic activity of iDCs. We have shown that pMSCs have an inhibitory effect on the differentiation, maturation and function of DCs, as well as on the proliferation of T cells, suggesting that pMSCs can control the immune responses at multiple levels.