Inflammation is important in the etio-pathogenesis of pulmonary diseases such as Cystic Fibrosis (CF), bronchoalveolar dysplasia and asthma, often contributing to severe morbidity and mortality. Human Mesenchymal Stem Cells (hMSCs) are known to have anti-inflammatory potential. Umbilical cord tissue is rich in hMSCs, thus making it a feasible option for anti-inflammatory hMSC therapeutic sourcing. Human Cord Tissue (HCT) derived hMSCs were evaluated for their functional potential to treat inflammation, with the hypothesis that HCT hMSCs secrete products that are anti-inflammatory, and that they alter epithelial cell expression of inflammatory properties as well. Further, these studies begin to identify optimized growth conditions to produce the most potent anti-inflammatory effect from the cord tissue derived hMSCs as well as address donor variability in hMSC sourcing. HCT hMSCs cultured with or without Lipopolysaccharide (LPS) or Peptidoglycan (PEP) were analyzed for secreted cytokines using Luminex and for gene expression utilizing RT-PCR and functionality by anti-inflammatory activity on epithelial cell line A549 cells. hMSCs expressed chemokines Interleukin 6 (IL-6), Interleukin 8 (IL-8), Chemokine Ligand 20 (CCL-20), Stem Cell Factor (SCF), and Monocyte Chemoattractant Protein-1 (MCP-1); LPS and PEP enhanced cytokine secretion. hMSCs secreted IL-6, IL-8, Macrophage Inflammatory Protein1-alpha (MIP1a), Tumor Necrosis Factor-alpha (TNF-a) and Interleukin 1-beta (IL-1B); with LPS and PEP stimulation following similar trends. HCT hMSCs showed IL-6 and IL-8 increased expression in functionality assay, which could be altered for optimization through changes in media glucose concentration. hMSCs secrete a variety of cytokines and display anti-inflammatory activity, with growth medium and donor variability. Optimization of HCT through growth medium as well as donor sourcing may be important for the development of disease specific therapeutics, but ultimately holds promise as a rich source for hMSCs.