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Steroid‐refractory chronic graft‐vs‐host disease (cGvHD) contributes to morbidity after allogeneic hematopoietic stem cell transplantation. Here, we report on 11 patients with severe, refractory cGvHD treated with repeated infusions of allogeneic bone marrow‐derived mesenchymal stromal cells (MSC) over a 6‐ to 12‐month period. Six patients responded to MSC treatment following National Institutes of Health response criteria, accompanied by improvement in GvHD‐related symptoms and quality of life. This response was durable, with systemic immunosuppressive therapy withdrawn from two responders, and a further two free from steroids and tapering calcineurin inhibitors. All responders displayed a distinct immune phenotype characterized by higher levels of naïve T cells and B cells before treatment compared with the nonresponders, and a significantly higher fraction of CD31+ naïve CD4+ T cells. MSC treatment was associated with significant increases in naïve T cells, B cells, and Tregs 7 days after each infusion. Skin biopsies showed resolution of epidermal pathology. CXCL9 and CXCL10 showed differential responses in responder and nonresponder patients. Our data support the use of MSC infusions as treatment for steroid‐refractory cGvHD with durable responses. We propose CXCL9 and CXCL10 as early biomarkers for responsiveness to MSC treatment. Our results highlight the importance of the MSC recipient immune phenotype in promoting treatment response. This trial was registered at www.ClinicalTrials.govas #NCT01522716. A, In this clinical phase II study, 11 patients with severe, refractory chronic graft‐vs‐host disease (cGvHD) were treated with repeated monthly infusions of mesenchymal stromal cell (MSC). B, Six patients responded with a reduction in disease severity as measured by the National Institutes of Health score. Immunological analysis revealed that response was associated with an immune profile with increased naïve CD4+ T‐cell and Treg numbers. In addition, a better thymic function in the responders was suggested based on increased ratio of recent thymic emigrants among naïve CD4+ T cells. Short‐term after each infusion we observed an increase in CD4+ T‐cell and Treg numbers in the responders. Skin histology improved in both groups with reduced epidermal inflammation. Our results support the use of MSC infusions for refractory cGvHD and suggest the recipient immune system phenotype as a predictor of responsiveness. R, responder; NR, nonresponder.