The Wharton's jelly of the umbilical cord is believed to be a source of mesenchymal stem cells (MSCs) which can be therapeutically applied in degenerative diseases.In this study, we investigated the immunomodulatory effect of umbilical cord derived-mesenchymal stem cells (UC-MSCs) and bone marrow-derived-mesenchymal stem cells (BM-MSCs) on differentiation, maturation, and endocytosis of monocyte-derived dendritic cells in a transwell culture system under laboratory conditions. Monocytes were differentiated into immature dendritic cells (iDCs) in the presence of GM-CSF and IL-4 for 6 days and then differentiated into mature dendritic cells (mDCs) in the presence of TNF-α for 2 days. In every stage of differentiation, immature and mature dendritic cells were separately co-cultured with UC-MSCs and BM-MSCs. The findings showed that UC-MSCs and BM-MSCs inhibited strongly differentiation and maturation of dendritic cells at higher dilution ratios (1:1). The BM-MSCs and UC-MSCs showed more inhibitory effect on CD1a, CD83, CD86 expression, and dendritic cell endocytic activity, respectively. On the other hand, these cells severely up-regulated CD14 marker expression. We concluded that UC-MSCs and BM-MSCs could inhibit differentiation, maturation and endocytosis in monocyte-derived DCs through the secreted factors and free of any cell-cell contacts under laboratory conditions. As DCs are believed to be the main antigen presenting cells for naïve T cells in triggering immune responses, it would be logical that their inhibitory effect on differentiation, maturation and function can decrease or modulate immune and inflammatory responses.