Dendritic cells (DCs) are specialised antigen-presenting cells that play crucial roles in the initiation and regulation of immune responses. Recently, mesenchymal stem cells (MSCs) have gained further interest after demonstration of immunomodulatory effects on complicated interactions between T cells and even DCs. However, the mechanisms underlying these immunoregulatory effects of MSCs induced DCs are poorly understood. In addition, it is unclear whether the immunoregulatory functions of MSCs are altered in disease states. In this study, we showed that chronic myeloid leukaemia (CML) patients bone marrow derived MSCs (CML-MSC) could differentiate mature DCs (mDCs) into a distinct regulatory DC population, they had lower expression of CD40, CD80, CD83 and CD86. Similar to immature DCs (imDCs), CML-MSC induced DCs (CML-MSC-DCs) displayed powerful phagocytic capacity. Moreover, CML-MSC-DCs had the capacity to induce T cell anergy, another capacity of regulatory DCs. CML-MSC-DCs could inhibit the proliferation of T cells not only through TGF-β1, but also by inducing the production of Treg cells or T-cell anergy. At last, CML-MSC-DCs could efficiently induce more CD4+CD25+Foxp3+Tregs from naive CD4+CD25-Foxp3-T cells than that of normal-MSC-DCs in vitro. CML-MSC-DCs derived TGF-β1 was largely responsible for the increase in CD4+CD25+Foxp3+Tregs based on knockdown studies. The immunoregulatory effects of DCs induced by CML-MSCs enhance the potential use of autologous MSCs in cell therapy.