Atherosclerosis is a chronic inflammatory disease characterized by the formation of plaques inside arteries, leading to narrowing and blockage. Potential therapeutic strategies include expanding the population of regulatory T-cells (Tregs) to enhance atheroprotective immunity, and inhibiting the formation of macrophage foam cells. Here, we studied the effect of bone marrow-derived mesenchymal stem cells (BM-MSCs) on atherosclerotic plaque formation in Apolipoprotein E−/− (ApoE-KO) mice, and elucidated the underlying mechanism. BM-MSCs isolated from 4 week-old ApoE-KO mice were evaluated by flow cytometry for expression of MSC-specific markers. Thirty eight week-old ApoE-KO mice were randomly divided into three experimental groups (n = 10 per group): 1. MSC group—received BM-MSCs intravenously; 2. Vehicle group—received DMEM; 3. Control group—did not receive any treatment. Administration of MSCs resulted in a marked decrease in the size of atherosclerotic plaques 3 months after treatment. In addition, the number and function of CD4+CD25+FOXP3+ regulatory T-cells (Tregs) in cultured splenocytes, and the expression of FOXP3 at both mRNA and protein levels, was significantly increased in the MSC group. In vitro experiments further indicated that the formation of macrophage foam cells was inhibited by treatment with MSCs, accompanied by a significant downregulation in CD36 and scavenger receptor A (SRA). Our findings suggest that MSCs play an atheroprotective role by enhancing the number and function of Tregs and inhibiting the formation of macrophage foam cells. Hence, administration of MSCs to atherosclerotic patients might have significant clinical benefits.