The therapeutic potential of donor-derived mesenchymal stromal cells (MSCs) has been investigated in diverse diseases1, including steroid-resistant acute graft versus host disease (SR-aGvHD)2. However, conventional manufacturing approaches are hampered by challenges with scalability and interdonor variability, and clinical trials have shown inconsistent outcomes3,4. Induced pluripotent stem cells (iPSCs) have the potential to overcome these challenges, due to their capacity for multilineage differentiation and indefinite proliferation5,6. Nonetheless, human clinical trials of iPSC-derived cells have not previously been completed. CYP-001 (iPSC-derived MSCs) is produced using an optimized, good manufacturing practice (GMP)-compliant manufacturing process. We conducted a phase 1, open-label clinical trial (no. NCT02923375) in subjects with SR-aGvHD. Sixteen subjects were screened and sequentially assigned to cohort A or cohort B (n = 8 per group). One subject in cohort B withdrew before receiving CYP-001 and was excluded from analysis. All other subjects received intravenous infusions of CYP-001 on days 0 and 7, at a dose level of either 1 × 106 cells per kg body weight, to a maximum of 1 × 108 cells per infusion (cohort A), or 2 × 106 cells per kg body weight, to a maximum dose of 2 × 108 cells per infusion (cohort B). The primary objective was to assess the safety and tolerability of CYP-001, while the secondary objectives were to evaluate efficacy based on the proportion of participants who showed a complete response (CR), overall response (OR) and overall survival (OS) by days 28/100. CYP-001 was safe and well tolerated. No serious adverse events were assessed as related to CYP-001. OR, CR and OS rates by day 100 were 86.7, 53.3 and 86.7%, respectively. The therapeutic application of iPSC-derived MSCs may now be explored in diverse inflammatory and immune-mediated diseases.