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Mesenchymal stem cells (MSCs) are known to promote tissue regeneration and suppress excessive inflammation caused by infection or trauma. Reported evidence indicates that various factors influence the expression of MSCs' endogenous immunomodulatory properties. However, the detailed interactions of MSCs with macrophages, which are key cells involved in tissue repair, and their regulatory mechanisms are not completely understood. We herein investigated how age-related immunomodulatory impairment of MSCs alters the interaction of MSCs with macrophages during bone healing using young (5-week old) and aged (50-week old) mice. To clarify the relationship between inflammatory macrophages (M1) and MSCs, their spatiotemporal localization at the bone healing site was investigated by immunostaining, and possible regulatory mechanisms were analyzed in vitro co-cultures. Histomorphometric analysis revealed an accumulation of M1 and a decrease in MSC number at the healing site in aged mice, which showed a delayed bone healing. In in vitro co-cultures, MSCs induced M1 apoptosis through cell-to-cell contact but suppressed the gene expression of pro-inflammatory cytokines by soluble factors secreted in the culture supernatant. Interestingly, interleukin 38 (Il-38) expression was up-regulated in M1 after co-culture with MSCs. IL-38 suppressed the gene expression of inflammatory cytokines in M1 and promoted the expression of genes associated with M1 polarization to anti-inflammatory macrophages (M2). IL-38 also had an inhibitory effect on M1 apoptosis. These results suggest that MSCs may induce M1 apoptosis, suppress inflammatory cytokine production by M1, and induce their polarization toward M2. Nevertheless, in aged conditions, the decreased number and immunomodulatory function of MSCs could be associated with a delayed M1 clearance (i.e., apoptosis and/or polarization) and consequent delayed resolution of the inflammatory phase. Furthermore, M1-derived IL-38 may be associated with immunoregulation in the tissue regeneration site. [ABSTRACT FROM AUTHOR]