Adult bone marrow-derived mesenchymal stem cells (MSCs) are regarded as potential candidates for treatment of neurodegenerative disorders, because of their ability to promote neurogenesis. MSCs promote neurogenesis by differentiating into neural lineages as well as by expressing neurotrophic factors that enhance the survival and differentiation of neural progenitor cells. Depression has been associated with impaired neurogenesis in the hippocampus and dentate gyrus. Therefore, the aim of this study was to analyze the therapeutic potential of MSCs in the Flinders sensitive line (FSL), a rat animal model for depression. Rats received an intracerebroventricular injection of culture-expanded and 1,1'-dioctadecyl-3,3,3',3'-tetramethylindocarbocyanine perchlorate (DiI)-labeled bone marrow-derived MSCs (10⁵ cells). MSC-transplanted FSL rats showed significant improvement in their behavioral performance, as measured by the forced swim test and the dominant-submissive relationship (DSR) paradigm. After transplantation, MSCs migrated mainly to the ipsilateral dentate gyrus, CA1 and CA3 regions of the hippocampus, and to a lesser extent to the thalamus, hypothalamus, cortex and contralateral hippocampus. Neurogenesis was increased in the ipsilateral dentate gyrus and hippocampus of engrafted rats (granular cell layer) and was correlated with MSC engraftment and behavioral performance. We therefore postulate that MSCs may serve as a novel modality for treating depressive disorders.