Rationale: Acute respiratory distress syndrome (ARDS) remains a major cause of respiratory failure in critically ill patients. Mesenchymal stromal cells (MSCs) are a promising candidate for a cell-based therapy. However, the mechanisms of MSCs' effects in ARDS are not well understood. In this study, we focused on the paracrine effect of MSCs on macrophage polarization and the role of extracellular vesicle (EV)-mediated mitochondrial transfer.Objectives: To determine the effects of human MSCs on macrophage function in the ARDS environment and to elucidate the mechanisms of these effects.Methods: Human monocyte-derived macrophages (MDMs) were studied in noncontact coculture with human MSCs when stimulated with LPS or bronchoalveolar lavage fluid (BALF) from patients with ARDS. Murine alveolar macrophages (AMs) were cultured ex vivo with/without human MSC-derived EVs before adoptive transfer to LPS-injured mice.Measurements and Main Results: MSCs suppressed cytokine production, increased M2 macrophage marker expression, and augmented phagocytic capacity of human MDMs stimulated with LPS or ARDS BALF. These effects were partially mediated by CD44-expressing EVs. Adoptive transfer of AMs pretreated with MSCderived EVs reduced inflammation and lung injury in LPS-injured mice. Inhibition of oxidative phosphorylation in MDMs prevented the modulatory effects of MSCs. Generating dysfunctional mitochondria in MSCs using rhodamine 6G pretreatment also abrogated these effects.Conclusions: In the ARDS environment, MSCs promote an antiinflammatory and highly phagocytic macrophage phenotype through EV-mediated mitochondrial transfer. MSC-induced changes in macrophage phenotype critically depend on enhancement of macrophage oxidative phosphorylation. AMs treated with MSCderived EVs ameliorate lung injury in vivo.