With a view towards harnessing the therapeutic potential of canine mesenchymal stem cells (cMSCs) we have examined the immunomodulatory and anti-inflammatory properties of cMSCs produced from canine induced pluripotent stem cells (ciPSC.MSCs) in comparison with MSCs harvested from canine adipose tissue (cAT.MSC) and bone marrow (cBM.MSC). Deep sequencing of the ciPSC.MSC transcriptome confirmed that ciPSC.MSCs share a greater similarity with cBM.MSCs than ciPSCs. ciPSC.MSCs and cBM.MSCs express a range of pluripotency factors in common with ciPSCs; however, ESRRB and PRDM-14, factors associated with naïve, pluripotency were expressed only in the ciPSCs. LOXL-2, involved in epithelial to mesenchymal transition (EMT), is upregulated in both types of cMSCs while CDH-1, which is repressed during EMT, is downregulated in the MSCs compared to the ciPSCs. ciPSC.MSCs constitutively express immunomodulatory factors iNOS, GAL-9, TGF-β1, PTGER-2α and VEGF, and pro-inflammatory mediators COX-2, IL-1β and IL-8. When stimulated with pro-inflammatory cytokines canine tumor necrosis factor-α (cTNF-α), canine interferon-γ (cIFN-γ), or combination of both, ciPSC.MSCs upregulated expression of IDO, iNOS, GAL-9, HGF, TGF-β1, PTGER-2α, VEGF, COX-2, IL-1β and IL-8. To examine osteogenic and chondrogenic capabilities of ciPSC.MSCs in comparison to cAT.MSCs and cBM.MSCs, MSCs were cultured with chondrogenic and osteogenic differentiation media. Culture of ciPSC.MSCs and harvested MSCs with chondrogenic medium showed expression of cartilage-specific markers SOX-9, COLII, aggrecan, and COMP. When cultured in osteogenic medium all MSCs expressed COLI and immunostained positively for hydroxyapatite. All 3 types of MSCs were also seeded into decellularised extracellular matrix (DECM) scaffolds. DECM scaffolds seeded with iPSC.MSCs and cultured in chondrogenic medium showed deposition of new cartilage matrix confirmed by glycosaminoglycan (GAG) staining. DECM scaffolds seeded with iPSC.MSCs and cultured in osteogenic medium showed some staining with Alizarin red for calcium compounds. These findings support further investigation into the use of ciPSC.MSCs for management of canine immune-mediated and inflammatory disorders.