ABSTRACT: High plasticity is a hallmark of mesenchymal stem cells (MSCs), and as such, their differentiation and activities may be shaped by factors of their microenvironment. Bones, tumors, and cardiomyopathy are examples of niches and conditions that contain MSCs and are enriched with tumor necrosis factor ? (TNF?) and transforming growth factor ?1 (TGF?1). These two cytokines are generally considered as having opposing roles in regulating immunity and inflammation (pro- and anti-inflammatory, respectively). Here, we performed global gene expression analysis of human bone marrow-derived MSCs and identified overlap in half of the transcriptional programs that were modified by TNF? and TGF?1. The two cytokines elevated the mRNA expression of soluble factors, including mRNAs of pro-inflammatory mediators. Accordingly, the typical pro-inflammatory factor TNF? prominently induced the protein expression levels of the pro-inflammatory mediators CCL2, CXCL8 (IL-8), and cyclooxygenase-2 (Cox-2) in MSCs, through the NF-?B/p65 pathway. In parallel, TGF?1 did not elevate CXCL8 protein levels and induced the protein expression of CCL2 at much lower levels than TNF?; yet, TGF?1 readily induced Cox-2 and acted predominantly via the Smad3 pathway. Interestingly, combined stimulation of MSCs by TNF??+?TGF?1 led to a cooperative induction of all three inflammatory mediators, indicating that TGF?1 functioned as a co-inflammatory cytokine in the presence of TNF?. The cooperative activities of TNF??+?TGF?1 that have led to CCL2 and CXCL8 induction were almost exclusively dependent on p65 activation and were not regulated by Smad3 or by the upstream regulator TGF?-activated kinase 1 (TAK1). In contrast, the TNF??+?TGF?1-induced cooperative elevation in Cox-2 was mostly dependent on Smad3 (demonstrating cooperativity with activated NF-?B) and was partly regulated by TAK1. Studies with MSCs activated by TNF??+?TGF?1 revealed that they release factors that can affect other cells in their microenvironment and induce breast tumor cell elongation, migration, and scattering out of spheroid tumor masses. Thus, our findings demonstrate a TNF??+?TGF?1-driven pro-inflammatory fate in MSCs, identify specific molecular mechanisms involved, and propose that TNF??+?TGF?1-stimulated MSCs influence the tumor niche. These observations suggest key roles for the microenvironment in regulating MSC functions, which in turn may affect different health-related conditions.