Mesenchymal stromal cells (MSCs) possess therapeutic benefits in treating inflammatory diseases. However, the mechanisms underlying their therapeutic effects are unclear, hindering the clinical translation of MSC therapy. This project investigated the mode of action of MSC therapy following local administration. MSCs exhibited local protective effects and remote anti-inflammatory effects without migrating away from the injection site. This project identified the lymph node as a key location where MSCs initiated their local and remote effects by inducing immunoregulatory cells. Findings from this project advanced our understanding of the mechanisms of MSC therapy and will aid in effective clinical translation.