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Mesenchymal stem cells (MSCs) have been demonstrated to ameliorate rejection after transplantation via their actions on multiple immune cells, potentially including regulatory IL-10-producing B cells (Breg cells). However, Breg cells are heterogeneous, and the effects of MSCs on specific subsets of Breg cells are not yet clear.Purified B cells were co-cultured with MSCs, and the phenotypes and immunomodulatory functions of the B cells were analyzed by FACS and proliferation assays in vitro. In addition, the immunomodulatory functions of the specific Breg cell subset was evaluated both in vitro and in vivo.We demonstrated that co-culture with MSCs significantly enhanced the immunomodulatory activity of B cells by up-regulating IL-10 expression. We then identified that a novel regulatory B cell population characterized as CD23 and CD43 phenotypic markers could be induced by MSCs. The CD23+CD43+ Breg cells significantly inhibited the inflammatory cytokine secretion and proliferation of T cells through an IL-10-dependent pathway. Using a mouse model of colitis for immunomodulatory activity assay in vivo, we found that intraperitoneal injection of MSCs ameliorated the clinical and histopathological severity in the mouse experimental colitis model, accompanied by the increasing frequency of CD23+CD43+ Breg cells. The adoptive transfer of CD23+CD43+ Breg cells effectively alleviated murine colitis, as compared with the CD23-CD43- B cells group.The novel CD23+CD43+ Breg cell subset appear to be involved in the immunomodulatory function of MSCs and shed new light on elucidating the therapeutic mechanism of MSCs for the treatment of transplant rejection and MSC-mediated transplantation tolerance.The National Natural Science Foundation of China (81425016, 81600102, 81601381, 31771616, 81730005).