Mesenchymal stromal cells (MSCs) have immunomodulatory and tissue-reparative properties and are easily isolated and expanded in culture. As such, MSCs present as an attractive therapeutic cell type in treating inflammation-driven diseases. However, the mechanisms underlying their immunoregulatory effects are not well understood. MSC secretomes are thought to mediate the therapeutic effects of MSCs. However, recent studies from our lab and others highlighted MSC apoptosis in the lung following intravenous infusion, as a critical step in MSC-induced immunoregulation. MSCs administered via extravascular routes do not undergo apoptosis in the lung but have also been shown to have therapeutic benefits. To investigate the mechanisms of extravascular MSC treatment, we have established a mouse model of localised inflammation with low dose lipopolysaccharide (LPS) and injected MSCs either directly at the site of inflammation (ipsilateral) or at the contralateral side. MSC treatment modulated inflammation by inducing an increase in IL-10-expressing immunoregulatory innate immune cells in the draining lymph nodes. Injected MSCs were detected only at the site of injection, yet an increase in the expression of immunosuppressive molecules, such as indoleamine 2,3-dioxygenase (IDO), was detected in the splenic innate immune population. This suggested splenic immunoregulation in extravascular MSC treatment. Our data indicate that innate immune cells in the secondary lymphoid organs are important mediators of the anti-inflammatory effects of MSC treatment.