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Transplantation of mesenchymal stem cells (MSCs) into injured or diseased tissue—for the in situ delivery of a wide variety of MSC-secreted therapeutic proteins—is an emerging approach for the modulation of the clinical course of several diseases and traumata. From an emergency point-of-view, allogeneic MSCs have numerous advantages over patient-specific autologous MSCs since “off-the-shelf” cell preparations could be readily available for instant therapeutic intervention following acute injury. Although we confirmed the in vitro immunomodulatory capacity of allogeneic MSCs on antigen-presenting cells with standard coculture experiments, allogeneic MSC grafts were irrevocably rejected by the host's immune system upon either intramuscular or intracerebral transplantation. In an attempt to modulate MSC allograft rejection in vivo, we transduced MSCs with an interleukin-13 (IL13)-expressing lentiviral vector. Our data clearly indicate that prolonged survival of IL13-expressing allogeneic MSC grafts in muscle tissue coincided with the induction of an alternatively activated macrophage phenotype in vivo and a reduced number of alloantigen-reactive IFNγ- and/or IL2-producing CD8+ T cells compared to nonmodified allografts. Similarly, intracerebral IL13-expressing MSC allografts also exhibited prolonged survival and induction of an alternatively activated macrophage phenotype, although a peripheral T cell component was absent. In summary, this study demonstrates that both innate and adaptive immune responses are effectively modulated in vivo by locally secreted IL13, ultimately resulting in prolonged MSC allograft survival in both muscle and brain tissue. Stem Cells 2016;34:1971–1984., SCOPUS: ar.j, FLWOA, info:eu-repo/semantics/published