Many studies have shown that microglia in the activated state may be neurotoxic. It has been proven that uncontrolled or over-activated microglia play an important role in many neurodegenerative disorders. Bone marrow-derived mesenchymal stem cells (BMSCs) have been shown in many animal models to have a therapeutic effect on neural damage. Such a therapeutic effect is attributed to the fact that BMSCs have the ability to differentiate into neurons and to produce trophic factors, but there is little information available in the literature concerning whether BMSCs play a therapeutic role by affecting microglial activity. In this study, we triggered an inflammatory response situation in vitro by stimulating microglia with the bacterial endotoxin lipopolysaccharide (LPS), and then culturing these microglia with BMSC-conditioned medium (BMSC-CM). We found that BMSC-CM significantly inhibited proliferation and secretion of pro-inflammatory factors by activated microglia. Furthermore, we found that the phagocytic capacity of microglia was also inhibited by BMSC-CM. Finally, we investigated whether the induction of apoptosis and the production of nitric oxide (NO) were involved in the inhibition of microglial activation. We found that BMSC-CM significantly induced apoptosis of microglia, while no apoptosis was apparent in the LPS-stimulated microglia. Our study also provides evidence that NO participates in the inhibitory effect of BMSCs. Our experimental results provide evidence that BMSCs have the ability to maintain the resting phenotype of microglia or to control microglial activation through their production of several factors, indicating that BMSCs could be a promising therapeutic tool for treatment of diseases associated with microglial activation.