Graft-versus-host disease is a major complication of allogeneic hematopoietic stem cells transplantation, leading to serious morbidity and mortality. Mesenchymal stem cells(MSC)from bone marrow cause immunoregulation in vitro and in vivo. They also have the potential to protect from lethal GVHD after both autologous and allogeneic Hematopoietic Stem Cells Transplantation (HSCT). In this study, we investigated the mechanisms responsible for GVHD in the allo-HSCT co-transplantation with MSC condition. The model of acute GVHD in Rats was established using allogeneic HSC with donor-derived T cells transplantation, with or without additional donor-derived MSC co-transplantation. The degrees of GVHD were compared, the differentiation of CD4+, CD8+, Th1/Th2 and CD4+CD25+ T cells in vivo were assessed by flow cytometry and RT-PCR analyses. We found that MSC inhibited lethal GVHD after allo-HSCT. The value of CD8+ and CD4+ T cells and the ratio of Th1/Th2 T cell subsets decreased, at the same time the proportion of CD4+CD25+ T cells increased both in spleen lymphocytes and thymocytes in vivo after allo-HSCT with MSC co-transplantation compared with conventional allo-HSCT. Our results strongly suggested that BM-derived MSC has the function of preventing lethal GVHD after allo-HSCT by means of homeostasis of T subsets in vivo.