Abstract: Objective To investigate the effect of human umbilical cord-derived mesenchymal stem cells (UC-MSCs) on macrophages phenotype transition and the potential mechanisms. Methods Macrophages were achieved from C57BL/6J mice and divided into three groups:control group, LPS and IFN-γ induced group and MSCs group. After treated with lipopolysaccharide(LPS) and interferonγ (IFN-γ) for 24 hours, macrophages were co-cultured with UC-MSCs in a Transwell system (MSCs group)or not (LPS and IFN-γ induced group). The expression of inflammatory cytokines was measured by qRT-PCR and flow cytometry.Macrophages phenotype was detected by immunofluorescence. The polarization state and PI3K/AKT signaling pathway were detected by Western blot. Results After co-cultured with MSCs, macrophages manifested morphological changes with decrease of elongated cells, and levels of IL-1β, TNF-α in macrophages media reduced by 79.5% and 41.1%, respectively (P < 0.05, respectively), while levels of IL-4 increased by 91.4% compared with those of induced group (P < 0.05). Immunofluorescence analysis revealed that proportion of iNOS positive cells decreased by 32.48% and proportion of Arg1 positives cells increased by 32.25% in MSCs group (P< 0.05, respectively). Western blot analysis further showed unregulated expression of PI3K and p-AKT in MSCs group, and macrophages polarization towards M2 type was partly blocked after inhibiting PI3K/AKT signaling pathway. Conclusion UC-MSCs can polarize macrophages into M2 type and alleviate chronic inflammation, which is related to activation of PI3K-AKT signaling pathway.