Chronic inflammation is associated with upregulation of the transcription factor NF-κB and excessive inflammatory cytokine secretion by M1 macrophages. The anti-inflammatory cytokine IL-4 converts pro-inflammatory M1 macrophages into an anti-inflammatory and tissue regenerative M2 phenotype, thus reducing inflammation and enhancing tissue regeneration. We have generated NF-κB responsive, or constitutively active IL4-expression lentiviral vectors transduced into murine bone marrow-derived mesenchymal stromal cells (MSCs). MSCs with a constitutively active IL-4 expression vector produced large quantities of IL-4 continuously whereas IL-4 secretion was significantly induced by lipopolysaccharide (LPS) in the NF-κB sensing MSCs. In contrast, LPS had no effect on MSCs with IL-4 secretion driven by a constitutively active promoter. We also found that intermittent and continuous LPS treatment displayed distinct NF-κB activation profiles, and this regulation was independent of IL-4 signaling. The supernatant containing IL-4 from the LPS treated MSCs suppressed M1 marker (iNOS and TNFα) expression and enhanced M2 marker (Arginase 1, CD206, and IL1Ra) expression in primary murine macrophages. The IL-4 secretion at the basal, non-LPS induced level was sufficient to suppress TNFα and enhance Arginase 1 at a lower level, but had no significant effects on iNOS, CD206, and IL1Ra expression. Finally, IL-4 secretion at basal or LPS-induced levels significantly suppressed osteogenic differentiation of MSCs. Our findings suggest that the IL-4 secreting MSCs driven by NF-κB sensing or constitutive active promoter have great potential for mitigating the effects of chronic inflammation and promoting earlier tissue regeneration.