Mesenchymal stem cells (MSCs) are pleiotropic cells with potential therapeutic benefits for a wide range of diseases. Because of their immunomodulatory properties they have been utilized to treat autoimmune diseases such as multiple sclerosis (MS), which is characterized by demyelination. The microenvironment surrounding MSCs is thought to affect their differentiation and phenotype, which could in turn affect the efficacy. We thus sought to dissect the potential for differential impact of MSCs on central nervous system (CNS) disease in T cell mediated and non-T cell mediated settings using the MOG35–55 experimental autoimmune encephalomyelitis (EAE) and cuprizone-mediated demyelination models, respectively. As the pathogeneses of MS and EAE are thought to be mediated by IFNγ-producing (TH1) and IL-17A-producing (TH17) effector CD4+ T cells, we investigated the effect of MSCs on the development of these two key pathogenic cell groups. Although MSCs suppressed the activation and effector function of TH17 cells, they did not affect TH1 activation, but enhanced TH1 effector function and ultimately produced no effect on EAE. In the non- T cell mediated cuprizone model of demyelination, MSC administration had a positive effect, with an overall increase in myelin abundance in the brain of MSC-treated mice compared to controls. These results highlight the potential variability of MSCs as a biologic therapeutic tool in the treatment of autoimmune disease and the need for further investigation into the multifaceted functions of MSCs in diverse microenvironments and the mechanisms behind the diversity.