Multipotent mesenchymal stromal cells (MSCs) have immunosuppressive capacity but the exact mechanism by which they suppress proliferation of T lymphocytes is not fully understood. Recently, the characteristics and function of regulatory T lymphocytes (Tregs) have become better defined. Tregs and MSCs have immunosuppressive features in common. Here, we looked for a common basis for immunosuppression in these distinct cell types. Forkhead box P3 (FoxP3) and CD39 expression in MSCs was measured by flow cytometry and real-time quantitative polymerase chain reaction. The importance of FoxP3 in MSC-mediated immunosuppression was investigated by siRNA technology and mixed lymphocyte culture (MLC). The effect of 5-azacytidine and other immunosuppressive drugs on FoxP3 expression and immunosuppression by MSCs was explored by flow cytometry, MLC, and real-time quantitative polymerase chain reaction. MSCs express FoxP3 at variable levels, but they do not express CD39. FoxP3 MSCs suppress MLC to a greater extent than cells with lower FoxP3 expression. However, FoxP3-decreased MSCs were found to retain their immunosuppressive properties. 5-azacytitine had no effect on FoxP3 expression or MLC suppression by MSCs. However, immunosuppressive drugs led to increased FoxP3 levels and MLC inhibition in FoxP3 MSCs. This is the first demonstration of FoxP3 expression by MSCs. Although MSCs share several features with Tregs, and FoxP3 MSCs tend to be more immunosuppressive, MSCs do not require functional FoxP3 for their immunosuppressive activity. The increased MSC-mediated suppression of immune responses by immunosuppressive drugs deserves further investigation.