Human umbilical cord perivascular cells (HUCPVCs) are a novel population of mesenchymal progenitor cells (MPCs) which exhibit a higher proportion of colony forming unit-fibroblasts and faster doubling time than their bone marrow counterparts. The work herein describes the perivascular origin of HUCPVCs in the full term umbilical cord, using expression of various markers both in explanted cells and in situ cross sections of the cord.Bone marrow MPCs have been shown immunosuppressive in vitro, and as HUCPVCs share many characteristics with BM-MPCs, this capability was assayed in herein. This work demonstrates clear evidence of the immunoprivilege and immunomodulatory capabilities of HUCPVCs in both naive and effector immune responses, making them an applicable cell source for potential clinical applications in diseases such as graft versus host disease and autoimmune conditions. Thus, this easily derived, unique mesenchymal progenitor cell population has a perivascular origin, and is both immunoprivileged and immunomodulatory in vitro .