Background & Aim Establishment of a potency assay in the manufacturing of clinical grade mesenchymal stromal cells (MSCs) has been a challenge due to the issues of variability in starting cellular material, complex mechanisms of action, and lack of reference cells or materials. Indoleamine 2, 3-dioxygenase (IDO) is one of the most important factors for human MSC-mediated immunosuppression. IDO is expressed in IFN-γ-licensed MSC, but not in resting MSC in vitro. This intracellular enzyme catalyzes tryptophan degradation toward kynurenine and depletion of tryptophan suppresses T cells proliferation. Methods, Results & Conclusion In this study, we have developed a flow cytometry-based IDO assay for quantitatively measuring the IDO expression level per cell, the IPBV (Intracellular Protein Binding Value) of the cells represents the relative quantity of IDO expressed in the MSC. IPBV is defined as the number of anti-IDO fluorescent antibody molecules bound to intracellular IDO and standardized by fluorescence intensity of beads. Two kinds of in-house quality control reference cells were running in parallel with product to ensure that the assay is performing as expected and the level of IDO expression. Validation of the quantitative IDO assay, including accuracy, precision, specificity, linearity, range and robustness, were presented in this study. Moreover, we presented the application of the quantitative IDO assay for analysis of MSC product stability, comparability, and compatibility in the manufacturing of clinical grade MSC-based product- RegStem® ASC. In this study, we demonstrated the flow cytometry-based quantitative MSC IDO assay correlates with MSC's inhibition of autologous T cells proliferation, as well as the correlation with preliminary clinical effects in the phase I autologous MSC-based clinical trial for the treatment of Osteoarthritis. As the results, we believe that our novel flow cytometry-based quantitative IDO assay can be a potential potency assay candidate for advanced phase clinical trial of MSCs products.