This is a Phase III, randomized, double-blind, placebo-controlled study to investigate the efficacy and safety of Prochymal® versus placebo in combination with corticosteroids as initial therapy for acute GVHD. Corticosteroids have been the primary therapy for patients with previously untreated acute GVHD and the historical published data define an expected 35% complete response (CR) at Day +28 using this therapy.

Participants will be treated with a total of 6 infusions of investigational agent during the first 4 weeks of the study. The first infusion of the investigational product (IP) will be administered within 72 hours of the start of systemic corticosteroid therapy. Four infusions will be administered during the first two weeks (twice weekly), then two infusions administered during the next two weeks (once weekly). Participants assigned to the active treatment group will receive Prochymal®. Participants assigned to the non active treatment group will receive placebo (excipient, less cells). It is recommended that all participants receive all six infusions. The discontinuation of investigational agent is allowed for GVHD worsening with subsequent need for salvage therapy. All infusions must be given at least 3 days apart.

Participants will be evaluated for efficacy and safety until death, withdrawal or 90 study days after randomization, whichever occurs first. Study will be unblinded and data analyzed at Day 90 post 1st infusion (Day 0) following final participant enrollment. Participants will be followed for safety for 12 months post 1st infusion (Day 0).

Inclusion Criteria:

• Participants must be 18 years to 70 years of age, inclusive
• Participants must have received an allogeneic hematopoietic stem cell transplant using either bone marrow, peripheral blood stem cells or cord blood or administered a donor leukocyte infusion.
• Participants must have newly diagnosed Grades B-D acute GVHD. Biopsy confirmation of GVHD is strongly recommended but not required. Randomization should not be delayed awaiting biopsy or pathology results.
• Participants must be randomized and treated with corticosteroid (1-2 mg/kg/d methylprednisolone, or equivalent) and Prochymal®/placebo within 72 hours of onset of acute GVHD.
• Participants must have adequate renal function as defined by: Calculated Creatinine Clearance of >30 mL/min using the Cockcroft-Gault equation
• Participants who are women of childbearing potential, must be non-pregnant, not breast-feeding, and use adequate contraception. Male participants must use adequate contraception
• Participant must have a minimum Karnofsky Performance Level of at least 30 at the time of study entry
• Participant (or legal representative where appropriate) must be capable of providing written informed consent.

Exclusion Criteria:

• Participant has been previously treated with systemic immunosuppressive therapy for acute GVHD
• Participant has any underlying or current medical or psychiatric condition that, in the opinion of the Investigator, would interfere with the evaluation of the participant including uncontrolled infection, heart failure, pulmonary hypertension, etc.
• Participants may not receive any other investigational agents (not approved by the FDA for any indication) concurrently during study participation or within 30 days of randomization.
• Participant has a known allergy to bovine or porcine products or dimethyl sulfoxide (DMSO)
• Participant has received a transplant for a solid tumor disease.
• Participant requires more than 2 liters/min of oxygen to maintain stable oxygen saturation (Sa02) greater than or equal to 92%
• Participant requires a renal dopamine dose greater than 1-3 mcg/kg/min to maintain renal blood flow associated with renal failure and improved urinary output.