Mesenchymal stem cells (MSCs) have fueled ample translation for treatment of immune-mediated diseases. Our previous study had demonstrated that MSCs could elicit macrophages (Mφ) into anti-inflammatory phenotypes, and alleviate kidney injury in diabetic nephropathy (DN) mice via improving mitochondrial function of Mφ, yet the specific mechanism was unclear. Recent evidence indicated that MSCs communicated with their microenvironment through exchanges of mitochondria. By a coculture system consisting of MSCs and Mφ, we showed that MSCs-derived mitochondria (MSCs-Mito) were transferred into Mφ, and the mitochondrial functions were improved, which contributed to M2 polarization. Furthermore, we found that MSCs-Mito transfer activated peroxisome proliferator-activated receptor gamma coactivator-1 alpha (PGC-1α)-mediated mitochondrial biogenesis. In addition, PGC-1α interacted with TFEB in high glucose-induced Mφ, leading to the elevated lysosome-autophagy, which was essential to removal of damaged mitochondria. As a result, in Mφ, the mitochondrial bioenergy and capacity to combat inflammatory response were enhanced. Whereas, the immune-regulatory activity of MSCs-Mito was significantly blocked in PGC-1α knockdown Mφ. More importantly, MSCs-Mito transfer could be observed in DN mice, and the adoptive transfer of MSCs-Mito educated Mφ (MφMito ) inhibited the inflammatory response and alleviated kidney injury. However, the kidney-protective effects of MφMito were abolished when the MSCs-Mito was impaired with rotenone, and the similar results were also observed when MφMito were transfected with sipgc-1α before administration. Collectively, these findings suggested that MSCs elicited Mφ into anti-inflammatory phenotype and ameliorated kidney injury through mitochondrial transfer in DN mice, and the effects were relied on PGC-1α-mediated mitochondrial biogenesis and PGC-1α/TFEB-mediated lysosome-autophagy.Keywords: PGC-1α; TFEB; macrophages; mesenchymal stem cells; mitochondrial transfer.