This study investigates molecular and cellular mechanisms involved in mesenchymal stem cell (MSC)-mediated modulation of IL-17 signaling during liver fibrosis. Mice received CCl (1 μl/g intraperitoneally) twice/week for 1 month. MSCs (1 × 10 ), or MSC-conditioned medium (MSC-CM), were intravenously injected 24 h after CCl and on every 7th day. Liver fibrosis was determined by macroscopic examination, histological analysis, Sirius red staining, and RT-PCR. Serum levels of cytokines, indoleamine 2,3-dioxygenase (IDO), and kynurenine were determined by ELISA. Flow cytometry was performed to identify liver-infiltrated cells. In vitro, CD4 T cells were stimulated and cultured with MSCs. 1-methyltryptophan was used for inhibition of IDO. MSCs significantly attenuated CCl -induced liver fibrosis by decreasing serum levels of inflammatory IL-17, increasing immunosuppressive IL-10, IDO, and kynurenine, reducing number of IL-17 producing Th17 cells, and increasing percentage of CD4 IL-10 T cells. Injection of MSC-CM resulted with attenuated fibrosis accompanied with the reduced number of Th17 cells in the liver and decreased serum levels of IL-17. MSC-CM promoted expansion of CD4 FoxP3 IL-10 T regulatory cells and suppressed proliferation of Th17 cells. This phenomenon was completely abrogated in the presence of IDO inhibitor. MSCs, in IDO-dependent manner, suppress liver Th17 cells which lead to the attenuation of liver fibrosis.