Recent findings indicate that mesenchymal stem cells (MSCs) may act as a regulator of Th17 cell differentiation, however, the underlying mechanism is still under debate. To investigate the underlying mechanisms of MSCs' regulatory effect, mouse bone marrow-derived MSCs were cocultured with mouse CD4+CD25lowCD44lowCD62Lhigh T cells in vitro, and the proportion of induced Th17 cells, cytokines secretion, and transcription factors expression were examined by flow cytometry, enzyme-linked immunosorbent assay, quantitative reverse transcription polymerase chain reaction, and Western blotting. For the first time, our results showed that bone marrow-derived MSCs were able to inhibit Th17 cell differentiation via interleukin (IL)-10 secretion as the Th17 cell proportion was significantly regained when IL-10 was neutralized, or expression of IL-10 by bone marrow-derived MSCs was downregulated by RNA interference technique. Furthermore, IL-10 may suppress expression of Rorγt, the key transcription factor for Th17 cells, both by activating suppressor of cytokine signaling 3 through signal transducers and activators of transcription 5 phosphorylation, and decreasing signal transducers and activators of transcription 3 binding, which is at the promoter of Rorγt. Thus, our results demonstrate the inhibitory effect of MSCs on Th17 cells differentiation, and suggest increased IL-10 secretion might be the key factor.