The immunoregulatory function of T regulatory cells (Tregs) is impaired in multiple sclerosis (MS). Recent studies have shown that umbilical cord-derived mesenchymal stem cells (UC-MSCs) exert regulatory effect on the functions of immune cells. Thus, we investigated whether UC-MSCs could improve the impaired function of Tregs from MS patients. Co-cultures of UC-MSCs with PBMCs of MS patients were performed for 3 days. Flow cytometry was used to determine the frequency of Tregs. A cell proliferation assay was used to evaluate the suppressive capacity of Tregs. ELISA was conducted for cytokine analysis in the co-cultures. Our results showed that UC-MSCs significantly increased the frequency of CD4(+) CD25(+) CD127(low/-Tregs) in resting CD4(+) T cells (p<0.01) from MS, accompanied by the significantly augmented production of cytokine prostaglandin E2, transforming growth factor (-beta 1, and interleukin-10, along with a reduced interferon-gamma. production in these co-cultures (p<0.05 - 0.01). More importantly, UC-MSC-primed Tregs of MS patients significantly inhibited the proliferation of PHA-stimulated autologous and allogeneic CD4(+) CD25(-)T effector cells (Teffs) from MS patients and healthy individuals compared to non-UC-MSC- primed (naive) Tregs from the same MS patients (p<0.01). Furthermore, no remarkable differences in suppressing the proliferation of PHA-stimulated CD4(+) CD25(-)Teffs was observed in UC-MSC-primed Tregs from MS patients and naive Tregs from healthy subjects. The impaired suppressive function of Tregs from MS can be completely reversed in a co-culture by UC-MSC modulation. This report is the first to demonstrate that functional defects of Tregs in MS can be repaired in vitro using a simple UC-MSC priming approach.