Mesenchymal stem cells (MSCs) have the therapeutic potential to treat a wide variety of inflammatory and degenerative disease processes; however, little is known about how the recipient environment, the injured tissue into which the stem cells are delivered, affects the identity and function of the transplanted MSCs. Although MSCs can turn into many cell types of many tissues including joint, muscle, and nerve, contemporary evidence suggests that the regenerative effects of MSCs are through their ability to effectively improve the local environment rather than to serve as a cell source for new tissue. MSCs secrete numerous factors thought to produce the therapeutic effect through modulation of the injury reparative process and decreasing the immune reaction at the level of the local environment. Several studies have investigated how transplanted MSCs affect the injured recipient environment, but a large knowledge gap remains concerning the recipient environment effects on MSC function. In this proposal, we will determine how the environment regulates MSC identity, and the functional ability of MSCS to decrease the detrimental effects of inflammatory cells present in the damaged tissue targeted for therapeutic MSCs transplantation.