Mesenchymal stem cells (MSCs) are being tested in multiple clinical trials to treat inflammatory and degenerative diseases and are being developed as a new approach to prolonging the survival of transplanted allogeneic islets for treating diabetes. Although it is commonly believed that MSCs are immunoprivileged, it is also commonly observed, in both animals and humans, those MSCs mysteriously disappear within days after administration. Recent results from clinical trials using MSCs have also been disappointing, suggesting that, contrary to previous belief, MSCs are rapidly rejected by the host after administration and that current MSC- based therapies must be improved to be successful. Our recently published work and latest unpublished studies indicate that, after administration, in vitro expanded MSCs activate complement, an important component of the innate immune system with the primary role of attacking anything foreign to the host. The activated complement system then directly and indirectly attacks MSCs through multiple mechanisms, leading to reduced MSC viability and potency. In this proposed project, using an established model in which human islet allografts are co-transplanted with human MSCs into humanized mice, we will test the effect on the outcome of MSC/islet co-transplantation of our newly developed painting approach to locally inhibit complement activation on MSCs using an FDA-approved drug. We will also evaluate the synergetic effect of a second FDA-approved drug that upregulates expression of a native cell-surface complement inhibitor on MSCs to locally inhibit complement. Furthermore, we will elucidate the mechanisms underlying complement- mediated direct and indirect attack on MSCs. These studies will help clarify the mechanisms by which administered MSCs are rejected by the recipient, provide rationales for translating these simple strategies into the clinic in the near future as new approaches for improving outcome of MSC/islet co-transplantation for treating diabetes, and might help in the development of new approaches to improve the outcome of current MSC-based therapies for other inflammatory and degenerative diseases.