Multipotent mesenchymal stromal cells from the bone marrow ameliorate acute kidney injury through a mechanism other than transdifferentiation into renal tissue. Stromal cells exert immunoregulatory effects on dendritic and T cells, both of which are important in the pathophysiology of immune-mediated kidney injury. We hypothesized that similar cells with immunoregulatory function exist within the adult kidney. We isolated murine kidney-derived cells with morphologic features, growth properties, and an immunophenotype characteristic of mesenchymal stromal cells. These cells lacked lineage markers and could be differentiated into mesodermal cell lineages, including osteocytes and adipocytes. Furthermore, these kidney-derived cells induced the generation of bone marrow-derived dendritic cells with significantly reduced MHC II expression, increased CD80 expression, increased IL-10 production and the inability to stimulate CD4+ T cell proliferation in allogeneic and nominal antigen-specific cultures. Experiments in mixed and transwell cultures demonstrated that the production of soluble immune modulators, such as IL-6, was responsible for these effects on dendritic cell differentiation and maturation. Contact-dependent mechanisms, however, inhibited mitogenic T cell proliferation. In summary, kidney-derived cells may suppress inflammation in the kidney in vivo; a better understanding of their biology could have therapeutic implications in a wide variety of immune-mediated kidney diseases.