After injury to the CNS, microglia are rapidly activated and concentrated and trigger inflammatory reaction at the sites of injury. Bone marrow mesenchymal stem cells (BMMSC) represent attractive cell sources for treating CNS injury. Although anti-inflammatory and paracrine effects of grafted BMMSC have been shown, direct modulation of BMMSC on microglia in situ remains unclear. The present work employs in vitro transwell assay to characterize the effects of BMMSC on LPS-stimulated microglia. BMMSC are cultivated in serum and serum-free (sf) conditions, namely, BMMSC and BMMSC-sf. Both cultures express major surface markers specific for mesenchymal stem cells. However, the BMMSC-sf exhibit sphere-like structure with reduced expression of two adherent cell markers, CD29 and CD90. Compared to BMMSC-sf, BMMSC are fibroblast like and have faster differentiation potential into neural-like cells. Furthermore, BMMSC release significant levels of TIMP-1 and VEGF, regardless of being alone or in coculture. The downregulated MMP-9 mRNA may be caused by TIMP-1 secretion from BMMSC. Our cell culture system provides a powerful tool for investigating the molecular and cellular changes in microglia-BMMSC cocultures.