The role of mesenchymal stromal cells (MSCs) in the modulation of liver transplant tolerance has attracted significant interest. However, the interaction between MSCs and Kupffer cells (KCs) has received little attention, and the effect of this interaction on liver transplant tolerance remains unclear. KCs were cultured in the presence and absence of MSCs. After 24 h, cells were treated with lipopolysaccharide (LPS), after which the production of cytokines and the expression of surface antigens were measured for cell function identification. Moreover, the effects of the KCs and the prostaglandin E2 (PGE2) levels produced by the MSCs were determined using an experimental rat liver transplantation model. Blood and liver samples were collected at three time points after transplantation for further analysis. After LPS treatment, when compared with the KC single cultures, the expression of pro-inflammatory cytokines (IL-1β, IL-6, MHC-II, CD40, CD80, and CD86) in the coculture system was down-regulated, whereas the expression of anti-inflammatory cytokines (TGF-β, IL-4, PGE2, and IL-10) was markedly increased. These data indicate that MSCs can reprogram the phenotype of KCs. However, KCs treated with miR/TNF-α (tumor necrosis factor) plasmid prior to coculture to inhibit the production of TNF-α resulted in an inhibition of the reprogramming effect of MSCs. Moreover, overexpression of PGE2 in MSCs increased the effect of MSCs on KC reprogramming. After rat liver transplantation, allograft recipients that received MSCs showed better allograft tolerance when compared with rats in which KC function was inhibited. Furthermore, rats treated with MSCs overexpressing PGE2 demonstrated the best liver tolerance of all of the groups tested. MSCs reprogram the phenotype of KCs through TNF-α and PGE2, and this process is crucial for the immunomodulatory function of MSCs in liver transplantation.