Adult tissue-derived mesenchymal stromal cells (MSCs) are showing promise in clinical trials for systemic lupus erythematosus (SLE). However, the inability to manufacture large quantities of functional cells from a single donor as well as donor-dependent variability in quality limits their clinical utility. Human embryonic stem cell (hESC)-derived MSCs are an alternative to adult MSCs that can circumvent issues regarding scalability and consistent quality due to their derivation from a renewable starting material. Here, we show that hESC-MSCs prevent the progression of fatal lupus nephritis (LN) in NZB/W F1 (BWF1) mice. Treatment led to statistically significant reductions in proteinuria and serum creatinine and preserved renal architecture. Specifically, hESC-MSC treatment prevented disease-associated interstitial inflammation, protein cast deposition, and infiltration of CD3(+) lymphocytes in the kidneys. This therapy also led to significant reductions in serum levels of tumor necrosis factor alpha (TNFα) and interleukin 6 (IL-6), two inflammatory cytokines associated with SLE. Mechanistically, in vitro data support these findings, as co-culture of hESC-MSCs with lipopolysaccharide (LPS)-stimulated BWF1 lymphocytes decreased lymphocyte secretion of TNFα and IL-6, and enhanced the percentage of putative regulatory T cells. This study represents an important step in the development of a commercially scalable and efficacious cell therapy for SLE/LN.