The mechanisms underlying the immunomodulatory effects of mesenchymal stem cells (MSCs) have been essentially studied in conditions of strong T cell activation that represents extreme situation and induces rapid death of activated lymphocytes. The objective of this study was to investigate these mechanisms in absence of additional polyclonal activation. In cocultures of peripheral mononuclear blood cells with hMSC, we observed a striking decreased expression of CD8 level on CD8+ cells, together with decreased CD28 and CD44 expression and impaired IFN-gamma and Granzyme B production. This effect was specific to hMSCs, since it was not observed with several other cell lines. Down-regulation of CD8 expression required CD14+ monocytes in direct contact with the CD8+ cells, while the effects of hMSCs on the CD14+ cells were essentially mediated by soluble factors. The CD14+ monocytes exhibited a tolerogenic pattern when co-cultured with hMSCs, with a clear decrease in CD80 and CD86 co-stimulatory molecules, and an increase in the inhibitory receptors ILT-3 and ILT-4. MSC-preconditioned CD8+ cells had similar effects on monocytes and were able to inhibit lymphocyte proliferation. Injection of human MSCs in humanized NSG mice showed similar trends, in particular decreased CD44 and CD28 on human immune cells. Altogether, our study demonstrates a new immunomodulation mechanism of action of hMSCs through the modulation of CD8+ cells towards a non-cytotoxic/suppressive phenotype. This mechanism of action has to be taken into account in clinical trials, where it should be beneficial in grafts and autoimmune diseases, but potentially detrimental in malignant diseases.