The overarching aim of this work was to investigate the effects of hypoxic culture on mesenchymal stromal cell (MSC) immunomodulation and biodistribution in-vitro and in-vivo. Thus far, MSC have proved therapeutically beneficial for a number of inflammatory diseases such as acute Graft versus Host Disease (aGvHD). However, despite extensive in-vitro characterisations of MSC mechansims of immunomodulation, the exact modes of action in-vivo are not well understood. Importantly, large numbers of MSC are required in pre-clinical and clinical studies to further explore their utility in medicine. Despite the availability of MSC from almost all adult tissues, their ex-vivo life span is not finite and thus limits their in-vitro culture yield. Interestingly, physiological hypoxia can be employed in the laboratory to increase MSC numbers while mirroring a natural micro-environmental niche encountered in-vivo and therefore more biologically relevant. However, the effect hypoxia has on MSC immunomodulation has not been fully delineated. Therefore, the key goals of this thesis were to: (1) Determine what effect, if any, hypoxia exerts on MSC immunomodulatory abilities in-vitro and in a humanised mouse model of aGvHD. (2) Examine the short term homing capacity of hypoxic and normoxic culture expanded MSC in aGvHD. This study demonstrated that hypoxic culture increases MSC numbers in comparison to normoxic culture. In-vitro analysis of the effects of hypoxic MSC on peripheral blood mononuclear cells (PBMC) revealed less potent suppressor capacity than their normoxic counterparts. However, when harnessed in a humanised mouse model of aGvHD, it was revealed that hypoxic MSC prolonged the survival of aGvHD mice in line with normoxic MSC therapeutic efficacy. Of note, both hypoxic and normoxic MSC displayed similar biodistribution profiles, capable of migrating to aGvHD target organs as assessed by novel 3D Cryo-imaging. These findings contribute to a wider understanding of the effect of hypoxic culture on MSC immune regulation both in-vitro and in-vivo. In conclusion, this research provides a clinically and physiologically relevant method of culture expanding MSC for the treatment of inflammatory disease with the aim of reaching more patients in the clinic.