Marrow stromal cells (MSC) produce a microenvironment supporting hematopoiesis and may contribute immune tolerance because of low immunogenicity and the suppressive effect of alloreactivity. We investigated whether cotransplantation of MSC could prevent lethal graft-versus-host disease (GVHD) in major histocompatibility complex mismatched allogeneic murine hematopoietic stem cell transplantation (HSCT) using female BALB/c (H-2d, recipient) and C3H/He (H-2k, donor) mice. MSC were obtained from C3H/He bone marrow cells (BMC). MSC and irradiated BALB/c splenocytes (SP) were cocultured with C3H/He SP or BMC. Nonirradiated MSC did not inhibit the proliferation of alloantigen-stimulated BMC and SP. However, irradiated MSC suppressed the proliferation of alloantigen-stimulated SP at a level comparable with that of immunosuppressive agents, and the suppression by MSC was reversed to a significant degree by interleukin 2. Lethally irradiated BALB/c mice received transplants of donor cells according to the following experimental groups (group A, BMC only; group B, BMC and SP; group C, BMC, SP, and MSC; group D, BMC and MSC). The survival rate in group D was higher than in the other groups (P = .0057), and the clinical GVHD scores and serum levels of interferon-gamma were low in group D. Our results suggest that cotransplantation of MSC in HSCT prevents lethal GVHD, possibly by immune modulation.