Various source-derived mesenchymal stem cells (MSCs) have been considered for cell therapeutics in incurable diseases. To characterize MSCs from different sources, we compared human bone marrow (BM), adipose tissue (AT), and umbilical cord blood-derived MSCs (UCB-MSCs) for surface antigen expression, differentiation ability, proliferation capacity, clonality, tolerance for aging, and paracrine activity. Although MSCs from different tissues have similar levels of surface antigen expression, immunosuppressive activity, and differentiation ability, UCB-MSCs had the highest rate of cell proliferation and clonality, and significantly lower expression of p53, p21, and p16, well known markers of senescence. Since paracrine action is the main action of MSCs, we examined the anti-inflammatory activity of each MSC under lipopolysaccharide (LPS)-induced inflammation. Co-culture of UCB-MSCs with LPS-treated rat alveolar macrophage, reduced expression of inflammatory cytokines including interleukin-1α (IL-1α), IL-6, and IL-8 via angiopoietin-1 (Ang-1). Using recombinant Ang-1 as potential soluble paracrine factor or its small interference RNA (siRNA), we found that Ang-1 secretion was responsible for this beneficial effect in part by preventing inflammation. Our results demonstrate that primitive UCB-MSCs have biological advantages in comparison to adult sources, making UCB-MSCs a useful model for clinical applications of cell therapy.