Interactions between maternal natural killer lymphocytes (NKs) and fetal tissues are important in mediating maternal-fetal tolerance. We therefore investigated the interactions of NKs to placenta-derived multipotent cells (PDMCs) isolated from the term human placenta. PDMCs have similar cell surface marker expression as BMMSCs and additionally express human embryonic stem cell markers SSEA-4 and CD-9. Differentiation into the tri-mesodermal lineages of osteoblastic, adipocytic, and chondrogenic phenotypes can be readily achieved under the appropriate conditions. We found that PDMCs are more resistant to NK-mediated lysis than the Major Histocompatibility Complex (MHC) class-I null target cell K562, and can suppress NK secretion of interferon-γ (IFN-γ). Moreover, as third-party cells, PDMCs suppress the cytotoxic effects of cytokine-stimulated NKs on K562. Pretreatment of PDMCs with IFN-γ, a proinflammatory cytokine, surprisingly enhances such immunosuppressive effects. Cell-cell contact between NKs and PDMCs is required for suppressive effects, which are partially mediated by slight up-regulation of the NK inhibitory receptor Killer Inhibitory Receptor and down-regulation of the activating receptor NKp30. Moreover, enhancement of the suppressive effects of PDMCs is also mediated by IFN-γ-induced surface expression of HLA-G-an immunomodulatory non-classical MHC class I molecule-on PDMCs, as seen by partial reversibility with HLA-G neutralizing antibodies. With its broad immunosuppressive properties, PDMCs may represent a potential cell source for therapeutic use.