Background/Aim: Microglia, the resident macrophages in the central nervous system, secrete various proinflammatory cytokines and undergo proliferation upon activation in various neurodegenerative diseases. Activation of microglia has been implicated in exacerbation of various neurodegenerative diseases. Recently, it has been proposed that mesenchymal stem cells (MSC) have immunosuppressive properties and the potential to moderate inflammation. This study aimed to elucidate the effects of MSC-conditioned medium (MSC-CM) in modulating microglial activation by analyzing microglial proinflammatory and anti-inflammatory factors [interleukin (IL)-6, tumor necrosis factor (TNF)-a, inducible nitric oxide synthase (iNOS) and IL-10], signaling pathway molecules [NFκB, c-Jun N-terminal kinase (JNK) and MKP-1) and NO production. Methods: Immortalized murine microglia cell line, BV2 microglia and primary microglia isolated from C57BL/6 mouse pup brains were used in this study. Mouse MSC were isolated from the male C57BL/6 mouse tibia and fibula. The effects of MSC-CM on the expression of inflammatory cytokines and signaling molecules in microglia were elucidated using RT-PCR, immunofluorescence analysis and Western blot analysis. NO production in microglia was assessed using a Griess kit. Results: MSC-CM significantly reduced the mRNA and protein expression levels of proinflammatory cytokines (IL-6 and TNF-a) in microglia activated by lipopolysaccharide (LPS). In addition, MSC-CM significantly reduced the protein expression of NFκB, JNK and c-Jun, but increased the expression levels of IL-10 and MKP-1 in activated BV2 microglia. NO production and iNOS expression by BV2 microglia in MSC-CM were increased. Conclusions: Overall, our findings suggest that MSC immunomodulate microglial activities through paracrine effects.