MSCs derived from the umbilical cord tissue, termed UCX, were investigated for their immunomodulatory properties and compared to bone marrow-derived MSCs (BM-MSCs), the gold-standard in immunotherapy. Immunogenicity and immunosuppression were assessed by mixed lymphocyte reactions, suppression of lymphocyte proliferation and induction of regulatory T cells. Results showed that UCX were less immunogenic and showed higher immunosuppression activity than BM-MSCs. Further, UCX did not need prior activation or priming to exert their immunomodulatory effects. This was further corroboratedin vivoin a model of acute inflammation. To elucidate the potency differences observed between UCX and BM-MSCs, gene expression related to immune modulation was analysed in both cell types. Several gene expression profile differences were found between UCX and BM-MSCs, namely decreased expression ofHLA-DRA,HO-1,IGFBP1, 4 and 6,ILR1,IL6RandPTGESand increased expression ofCD200,CD273,CD274,IL1B,IL-8,LIFandTGFB2. The latter were confirmed at the protein expression level. Overall, these results show that UCX seem to be naturally more potent immunosuppressors and less immunogenic than BM-MSCs. We propose that these differences may be due to increased levels of immunomodulatory surface proteins such as CD200, CD273, CD274 and cytokines such as IL1β, IL-8, LIF and TGFβ2.