Mesenchymal stromal cells (MSCs) are potent immunomodulators that have successfully been used to circumvent various types of inflammations, including steroid-resistant graft-versus-host disease. Although initially believed to be restricted to multipotent MSCs, this immunoregulatory function is shared with differentiated cells from the mesenchymal lineage such as skin fibroblasts (SFs). Mesenchymal cell-induced immunoregulation is so potent that it may allow the reactivation of dormant malignancies, a fact that would preclude using such cells as therapeutic agents. Because NK cells are pivotal effectors controlling tumor cell containment we investigated the effect of allogenic MSCs and SFs on NK cell function in vitro. When NK cells were incubated with IL-15 and MSCs or SFs for 6 days, their proliferation and cytotoxic activity were significantly decreased compared to NK cells cultured with IL-15 alone or with human venous endothelial cells. Cytotoxic activity inhibition reached 86% when assayed on MHC-I(+) allogenic primary hematopoietic blasts, and was associated with a significant decrease in cytolytic granule exocytosis and in perforin release. Stromal cell-mediated inhibition was effective only if cell-cell proximity was long lasting: when NK cells were activated with IL-15 in the absence of MSCs and assayed for cytotoxicity in their presence no inhibition occurred. MSC inhibition was ultimately mediated by a soluble factor generated upon incubation with NK cells activated by IL-15 or IL-2. The indoleamine 2,3 dioxygenase was activated in MSCs and SFs because L-kynurenine was detected in inhibitory supernatants, but its blockade did not restore NK cell functions. The profound inhibition of cytotoxic activity directed against allogenic hematopoietic blasts exerted by MSCs and SFs on NK cells may be a concern. Should this occur in vivo it may induce the inability of NK cells to control residual or dormant malignant diseases after infusion of therapeutic MSCs.