The aim of the present study was to investigate the possible immunomodulatory effects of osteogenically differentiated bone marrow mesenchymal stem cells induced by hydrolyzed fish collagen. Marine biomaterials have attracted significant attention for their environmental friendliness and renewability. Hydrolyzed fish collagen (HFC) has been discovered to induce the osteoblastic differentiation of stem cells, which underlies the foundation for its application in tissue engineering. Stem cells and their biomaterial carriers face acute immune rejection mediated by host macrophages. A potential strategy for combatting rejection in stem cell therapy is to modify the polarization of macrophages. However, whether HFC-induced mesenchymal stem cells maintain their immunomodulatory ability remains to be determined. To understand this phenomenon, a co-culture model of direct contact was established between bone marrow mesenchymal stem cells (BMSCs) and RAW264.7 macrophages, where the secretion of nitrous oxide from macrophages was measured using Griess colorimetric assay. ELISAs were performed to measure the secretion of interleukin (IL)-1β, IL-6, transforming growth factor (TGF)-β and IL-10, whilst reverse transcription-quantitative PCR was used to assess the expression levels of IL-1β, IL-6, CD206, resistin-like molecule α (FIZZ1) and prostaglandin E2 receptor 4 (EP4). In addition, the expression levels of relevant proteins in the phosphorylated-cyclic AMP-responsive element-binding protein-CCAAT/enhancer-binding protein β (EBPβ) pathway were investigated using western blotting. HFC-induced BMSCs were found to suppress the expression levels of IL-1β and IL-6, whilst increasing the expression levels of CD206 and FIZZ1 in RAW264.7 macrophages. HFC-induced BMSCs also inhibited the secretion of IL-1β and IL-6, whilst promoting the secretion of TGF-β and IL-10 secretion from RAW264.7 macrophages. Mechanistic studies using western blotting discovered that HFC stimulated the secretion of prostaglandin E2 from BMSCs, which subsequently increased the expression of EP4 on the macrophages. EP4 then increased the expression levels of C/EBPβ and arginase 1 further. In conclusion, results from the present study suggested that following induction with HFC, BMSCs maintain their immunomodulatory activity.