Objective: Graft-versus-host disease (GVHD) is a major obstacle to successful allogeneic bone marrow transplantation (allo-BMT). While multipotent mesenchymal stromal cells (MSCs) demonstrate alloresponse in vitro and in vivo, they also have clinical applications toward prevention or treatment of GVHD. The aim of this study was to investigate the ability of MSCs to prevent or treat GVHD in a rat BMT model. Materials and Methods: The GVHD model was established by transplantation of Sprague Dawley rats’ bone marrow and spleen cells into lethally irradiated (950 cGy) SDxWistar rat recipients. A total of 49 rats were randomly assigned to 4 study and 3 control groups administered different GVHD prophylactic regimens including MSCs. After transplantation, clinical GVHD scores and survival status were monitored. Results: All irradiated and untreated control mice with GVHD died. MSCs inhibited lethal GVHD as efficiently as the standard GVHD prophylactic regimen. The gross and histopathological findings of GVHD and the ratio of CD4/CD8 expression decreased. The subgroup given MSCs displayed higher in vivo proportions of CD25+ T cells and plasma interleukin-2 levels as compared to conventional GVHD treatment after allo-BMT. Conclusion: Our results suggest that clinical use of MSCs in both prophylaxis against and treatment of established GVHD is effective. This study supports the use of MSCs in the prophylaxis and treatment of GVHD after allo-BMT; however, large scale studies are needed.