The ontogeny of haemopoiesis during fetal life and the differentiation of blood cells in adult life depend upon a fully competent microenvironment to provide appropriate signals via production of soluble factors and cell contact interactions. The cellular constituents of the microenvironment, also defined as the haemopoietic niche, largely derive from a common progenitor of mesenchymal origin. Mesenchymal stem cells (MSC), initially identified in adult bone marrow, have also been described in fetal haemopoietic tissues where they accompany the migration of haemopoietic development. Their precise identity remains ill-defined because of the lack of specific markers. Their ability to self-renew and differentiate into tissues of mesodermal origin (osteocytes, adipocytes, chondrocytes) and their lack of expression of haemopoietic molecules are currently the main criteria for isolation. In the bone marrow the most important elements of the niche appear to be osteoblasts, whilst a less defined population of fibroblasts regulates the maturation of immature T cells in the thymus. Recently, MSC have been shown to exert a profound immunosuppressive effect on polyclonal as well as antigen-specific T cell responses by inducing a state of division arrest anergy. Thus, the multipotent capacity of MSC, their role in supporting haemopoiesis, and their immunoregulatory activity make MSC particularly attractive for therapeutic exploitation.