Inflammatory diseases result in destructive events, leading to tissue loss and functional impairment. Due to their anti-inflammatory effect and direct effect in tissue repair, mesenchymal stem cells (MSCs) are often exploited as ideal experimental cells to cure inflammatory tissue damage. Although a modicum of success has been reported, controversial therapeutic outcomes have also been observed, suggesting that MSCs may not be always beneficial and have multi-faceted functions with respect to inflammatory diseases. We chose dental pulpitis as a disease model and observed that human pulpitis tissue consists of infiltrating macrophages, whereas healthy tissue mainly consists of dental pulp stem cells (DPSCs), a type of MSC population. Through in vitro experiments, we found that lipopolysaccharide (LPS)-activated macrophages turned DPSCs into inflammatory cells with the upregulation of proinflammatory cytokines, IL-6, IL-1β, and TNFα. The underlying mechanism is related to the release of TNFα from macrophages, which led to a shutdown of the reparative capacity of DPSCs. Furthermore, the activated DPSCs became pro-inflammatory regulators, augmenting the inflammation response of macrophages via a mechanism related to the upregulation of WNT5a. Interestingly, when we applied a commonly used dental capping material (iRoot BP plus) to stimulate macrophages, the generated immune environment inhibited the inflammatory response of DPSCs and turned them into anti-inflammatory regulators with a high reparative capacity. This implies that manipulating the multi-faceted effects of DPSCs is vital for capping material-mediated pulpitis treatment. Our results collectively demonstrate the multi-faceted properties of MSCs in the progress of inflammatory disease as 1) reparative cells, 2) inflammatory cells, and 3) immunoregulatory cells. It should be noted that the immunoregulatory property of MSCs is not always anti-inflammatory; the immunoregulatory property is determined by the local immune environment. Such multi-faceted effects of MSCs should be considered when applying cell/biomaterial-based therapies to inflammatory tissue repair and regeneration.