Acute graft-versus-host disease is a frequent complication associated with allogeneic hematopoietic stem cell transplantation. Patients that become refractory to initial steroid treatment have a poor prognosis. apceth-201 consists of human allogeneic mesenchymal stromal cells, engineered by lentiviral transduction to express the protease inhibitor alpha-1 antitrypsin, to augment the anti-inflammatory potential of the mesenchymal stromal cells. We show that apceth-201 mesenchymal stromal cells efficiently suppress T cell proliferation and polarize macrophages to an anti-inflammatory M2 type, in vitro. To assess the in vivo efficacy of apceth-201, it was tested in two different mouse models of acute graft-versus-host disease. Control animals in a humanized model succumbed quickly to disease, whereas median survival was doubled in apceth-201-treated animals. The product was also tested in a graft-versus-host disease model system that closely mimics haploidentical hematopoietic stem cell transplantation, an approach that is now being evaluated for use in the clinic. Control animals succumbed quickly to disease, whereas treatment with apceth-201 resulted in long-term survival of 57% of the animals. Within 25 days after the second injection, clinical scores returned to baseline in responding animals, indicating complete resolution of graft-versus-host disease. These promising data have led to planning of a phase I study using apceth-201. Copyright © 2019 The American Society of Gene and Cell Therapy. Published by Elsevier Inc. All rights reserved.