(DOC) paper: GZ JI RLM. Edited the manuscript: GZ JI WAD RLM. Contributed equally in all aspects: GZ JI. Interaction of a Specific Population of Human Embryonic Stem Cell–Derived Progenitor Cells with CD11b+ Cells Ameliorates Sepsis-Induced Lung Inflammatory Injury Human embryonic stem cells differentiated under mesoderm-inducing conditions have important therapeutic properties in sepsis-induced lung injury in mice. Single cell suspensions obtained from day 7 human embryoid bodies (d7EBs) injected i.v. 1 hour after cecal ligation and puncture significantly reduced lung inflammation and edema as well as production of tumor necrosis factor-α and interferon-γ in lungs compared with controls, whereas interleukin-10 production remained elevated. d7EB cell transplantation also reduced mortality to 50% from 90% in the control group. The protection was ascribed to d7EB cell interaction with lung resident CD11b+ cells, and was correlated with the ability of d7EB cells to reduce it also reduced production of proinflammatory cytokines by CD11+ cells, and to endothelial NO synthase–derived NO by d7EB cells, leading to inhibition of inducible macrophage-type NO synthase activation in CD11b+ cells. The protective progenitor cells were positive for the endothelial and hematopoietic lineage marker angiotensin converting enzyme (ACE). Only the ACE+ fraction modulated the proinflammatory profile of CD11b+ cells and reduced mortality in septic mice. In contrast to the nonprotective ACE-cell fraction, the ACE+ cell fraction also produced NO. These findings suggest that an ACE+ subset of human embryonic stem cell–derived progenitor cells has a highly specialized anti-inflammatory function that ameliorates sepsis-induced lung inflammation and reduces mortality. Lung inflammatory injury from septic shock is the leading cause of death in patients in the intensive care unit, 1 with mortality remaining at ϳ40%. 2 The disease is characterized by progressive respiratory failure with bilateral alveolar infiltrates and lung edema. 3 Transplantation of adult bone marrow-derived mesenchymal stromal cells, endothelial progenitor cells, and bone marrow-derived progenitor cells has been studied in models of sepsis 4 -11 ; however, the results have varied, and specific cell populations responsible for the protection have not been characterized. Although in some cases transplanted cells differentiated into specialized parenchymal cells, 7,10 the lung repair observed may also be secondary to immunomodulatory effects of the transplanted cells. 4, 6, 8 Previous studies have not addressed the effects of a well-defined progenitor population derived from embryonic stem cells (ESCs) in resolution of sepsis-induced lung injury. Because ESCs are pluripotent, it was surmised that specific progenitors derived from ESCs could effectively mitigate sepsis-induced lung inflammation and injury. Using blast progenitor cells from human ESCs (hESCs) cultured in conditions favoring development of mesoderm, 12 the present study addressed the role of a purified population of progenitor cells in the lung response to polymicrobial sepsis induced by cecal ligation and puncture (CLP). It was observed that transplantation of hESC-derived progenitor cells after induction of sepsis reduced lung inflammation and edema formation, and it also reduced production of proinflammatory cytokines tumor necrosis factor-␣ (TNF-␣) and interferon-␥ (IFN-␥) without affecting production of the anti-inflammatory cytokine interleukin (IL)-10. Recipient mice also demon-strated marked reduction in mortality. Dampening of lung inflammation was the result of progenitor cells enriched with the endothelial and hematopoietic progenitor cell marker angiotensin-converting enzyme (ACE) and was largely ascribed to the interaction of these cells with CD11bϩ cells in lungs. This interaction in turn mediated reduction in production of proinflammatory cytokines and high-output NO production by CD11bϩ cells.