Mesenchymal stem cells (MSC) are multipotent stem cells with a broad well-described immunosuppressive potential. They are able to modulate both the innate and the adaptive immune response. Particularly, MSC are able to regulate the phenotype and function of macrophages that are critical for different biological processes including wound healing, inflammation, pathogenesis of several autoimmune diseases, and tumor growth. These multifunctional roles of macrophages are due to their high plasticity, which enable them to adopt different phenotypes such as a pro-inflammatory M1 and anti-inflammatory M2 phenotype. MSC promote macrophage differentiation toward an M2-like phenotype with a high tissue remodeling potential and anti-inflammatory activity but also a pro-tumorigenic function. MSC regulatory effect on macrophages is mediated through the secretion of different immunomodulatory molecules such as PGE2, IL1RA, and IL-6. Moreover, the presence of macrophages in damaged tissue and inflammation is essential for MSC to exert their therapeutic function. In this chapter, we discuss how the interplay between macrophages and MSC mutually modulates their phenotypes and functions, orchestrates tissue repair, and controls inflammation during autoimmunity and tumor growth.