Background—Hypoxia induces an inflammatory response in the lung manifested by alternative activation of macrophages with elevation of pro-inflammatory mediators that are critical for the later development of hypoxic pulmonary hypertension (HPH). Mesenchymal stromal cell (MSC) transplantation inhibits lung inflammation, vascular remodeling and right heart failure, and reverses HPH in experimental models of disease. In this study, we aimed to investigate the paracrine mechanisms by which MSCs are protective in HPH. Methods and Results—We fractionated mouse MSC-conditioned media to identify the biologically-active component affecting in vivo hypoxic signaling and determined that exosomes, secreted membrane microvesicles, suppressed the hypoxic pulmonary influx of macrophages and the induction of pro-inflammatory and pro-proliferative mediators, including monocyte chemoattractant protein-1 and hypoxia-inducible mitogenic factor, in the murine model of HPH. Intravenous delivery of MSC-derived exosomes (MEX) inhibited vascular remodeling and HPH, whereas MEX-depleted media or fibroblast-derived exosomes had no effect. MEX suppressed the hypoxic activation of signal transducer and activator of transcription 3 (STAT3) and the upregulation of the miR-17 superfamily of microRNA clusters, whereas it increased lung levels of miR-204, a key microRNA whose expression is decreased in human PH. MEX produced by human umbilical cord MSCs inhibited STAT3 signaling in isolated human pulmonary artery endothelial cells demonstrating a direct effect of MEX on hypoxic vascular cells. Conclusions—This study indicates that MEX exert a pleiotropic protective effect on the lung and inhibit PH through suppression of hyperproliferative pathways, including STAT-3 mediated signaling induced by hypoxia.