It has been suggested that marrow stromal cells (MSCs) may be immunoprivileged and can engraft in allogeneic recipients with intact immune systems. We determined if the implantation of murine MSCs engineered to release erythropoietin (Epo) would be feasible in major histocompatibility complex (MHC)-mismatched allogeneic mice without immunosuppression, and we monitored hematocrit (Hct) as a reporter of MSC graft survival. MSCs from C57Bl/6 mice were engineered to release murine Epo (Epo+ MSCs) and implanted subcutaneously in either syngeneic C57Bl/6 mice or MHC-mismatched Balb/c mice. In syngeneic recipients, the Hct rapidly rose from baseline level and remained higher than .88 (88%) for more than 200 days. However, in MHC-mismatched recipient Balb/c mice, the Hct rose transiently and rapidly declined to baseline values. Repeat implantations in these same mice were associated with an acquired refractoriness in the Hct response consistent with alloimmunization to donor Epo+ MSCs. Allogeneic MSC implants had an increased proportion of host-derived lymphoid CD8+, natural killer T (NKT), and NK infiltrating cells compared with syngeneic controls, and splenocytes isolated from Balb/c mice that had received implants also displayed a significant interferon-gamma (IFNgamma) response to C57Bl/6 MSCs in vitro. These results strongly suggest that MSCs are not intrinsically immunoprivileged and cannot serve as a "universal donor" in immunocompetent MHC-mismatched recipients.