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Cell therapy for patients who have intractable muscle disorders may require highly regenerative cells from young, healthy allogeneic donors. Mesenchymal stem cells are currently under clinical investigation because they are known to induce muscle regeneration and believed to be immune privileged, thus making them suitable for allogeneic applications. However, it is unclear whether allogeneic and myogenic-induced mesenchymal stem cells retain their immunomodulatory characteristics. Therefore, our aim was to evaluate the effects of mesenchymal stem cell differentiation on the immune characteristics of cells in vitro. We investigated the immunologic properties of mesenchymal stem cells after myogenic induction. Mesenchymal stem cells were obtained from C57BL/6 mice and the C3H/10T1/2 murine mesenchymal stem cell line. Two different 5-aza-2′-deoxycytidine doses (0.5 and 3 µM) were evaluated for their effects on mesenchymal stem cell skeletal myogenic differentiation potential, immune antigen expression, and mixed lymphocytic reactions. Using a mixed lymphocytic reaction, we determined the optimal splenocyte proliferation inhibition dose. The induction of regulatory T cells was markedly increased by the addition of 3 µM 5-aza-2′-deoxycytidine–treated mesenchymal stem cells. Myogenic-induced mesenchymal stem cells do not elicit alloreactive lymphocyte proliferative responses and are able to modulate immune responses. These findings support the hypothesis that myogenic-induced mesenchymal stem cells may be transplantable across allogeneic barriers.