Background and Aims: Immunomodulatory properties of mesenchymal stem cells (MSCs) have been applied to reduce the incidence of graft-versus-host disease (GVHD) after hematopoietic stem cell transplantation (HSCT). Among the various sources of MSCs that have immunomodulatory effects in vitro, only placenta-derived MSCs (PD-MSCs) have not been evaluated in an in vivo model of GVHD. In this study, we investigated the immunomodulatory properties of PD-MSCs in vitro and evaluated their clinical potential for controlling GVHD in an animal model. Methods: A GVHD animal model was established by transplanting C57BL/6 donor bone marrow cells and spleen cells into lethally irradiated BALB/c recipient mice. To control GVHD, human PD-MSCs were transplanted into recipient mice (5 × 105 or 1 × 106 cells). Results: PD-MSCs suppressed mitogen-stimulated T cell proliferation in vitro in a dose-dependent manner. Moreover, PD-MSCs inhibited cytokine secretion (interleukin-12, tumor necrosis factor-α and interferon-γ) of activated T cells. In vivo, the survival rate in the PD-MSC group (transplanted with 1 × 106 cells) was higher than that in the control group and histological scores were low in the PD-MSC group. Conclusion: We present the first evidence that human PD-MSCs can efficiently control GVHD in an HSCT in vivo model.