Objective. Umbilical cord (UC)-derived mesenchymal stem cells (MSCs) have shown marked therapeutic effects in a number of diseases in animal studies, based on their potential for self-renewal and differentiation. No data are available on the effectiveness of UC MSC transplantation (MSCT) in human autoimmune disease. This study was undertaken to assess the efficacy and safety of allogeneic UC MSCT in patients with severe and treatment-refractory systemic lupus erythematosus (SLE).Methods. We conducted a single-arm trial that involved 16 SLE patients whose disease was refractory to standard treatment or who had life-threatening visceral involvement. All of the patients gave consent and underwent UC MSCT. Clinical changes were evaluated before and after transplantation using the SLE Disease Activity Index (SLEDAI), measurement of serum antinuclear antibody (ANA), anti-double-stranded DNA (anti-dsDNA) antibody, serum complement C3 and C4, and albumin levels, and assessment of and renal function. Evaluation of potential mechanisms of MSCT effects focused on the percentage of peripheral blood Treg cells and serum levels of cytokines.Results. From April 2007 to July 2009, a total of 16 patients with active SLE were enrolled and underwent UC MSCT. The median followup time after MSCT was 8.25 months (range 3-28 months). Significant improvements in the SLEDAI score, levels of serum ANA, anti-dsDNA antibody, serum albumin, and complement C3, and renal function were observed. Clinical remission was accompanied by an increase in peripheral Treg cells and a re-established balance between Th1-and Th2-related cytokines. Significant reduction in disease activity was achieved in all patients, and there has been no recurrence to date and no treatment-related deaths.Conclusion. Our findings indicate that UC MSCT results in amelioration of disease activity, serologic changes, and stabilization of proinflammatory cytokines. These data provide a foundation for conducting a randomized controlled trial of this new therapy for severe and treatment-refractory SLE.Systemic lupus erythematosus (SLE) is an inflammatory disease with protean manifestations, ranging from relatively minor skin and joint symptoms to severe life-threatening major organ involvement, such as nephritis and neuropsychiatric complications (1). It is characterized by the presence of autoreactive T and B lymphocytes, with polyclonal activation of B cells and the consequent production of autoantibodies by plasma ClinicalTrials.gov identifier: NCT00698191.