Human mesoangioblasts are currently in a phase I/II clinical trial for the treatment of patients with Duchenne muscular dystrophy. However, limitations associated with the finite life span of these cells combined with the significant numbers of mesoangioblasts required to treat all of the skeletal muscles in these patients restricts their therapeutic potential. Induced pluripotent stem cell (iPSC)-derived mesoangioblasts may provide the solution to this problem. Although, the idea of using iPSC-derived cell therapies has been proposed for quite some time, our understanding of how the immune system interacts with these cells is inadequate. Herein, we show that iPSC-derived mesoangioblasts (HIDEMs) from healthy donors and, importantly, limb-girdle muscular dystrophy 2D patients exert immunosuppressive effects on T cell proliferation. Interferon gamma (IFN-γ) and tumour necrosis factor alpha (TNF-α) play crucial roles in the initial activation of HIDEMs and importantly indoleamine 2,3 dioxygenase (IDO) and prostaglandin E2 (PGE-2) were identified as key mechanisms involved in HIDEM suppression of T cell proliferation. Together with recent studies confirming the myogenic function and regenerative potential of these cells, we suggest that HIDEMs could provide an unlimited alternative source for mesoangioblast-based therapies.