Embryoid bodies (EBs) are three dimensional aggregates of pluripotent stem cells primarily used to investigate morphogenesis and cell toxicity, are also attractive tools in regenerative medicine. While embryonic stem cells (ESCs) and induced pluripotent cells (IPSCs) have been shown to form EBs in mouse, primate and humans, EB formation have not been previously demonstrated in mesenchymal stem cells (MSCs). Here we show that rat MSCs form EBs; which express regulatory T cell (Treg) marker Foxp3 and CC chemokine CCL1 receptor CCR8. We show a novel method for formation of EBs from MSCs under stress and demonstrate that the induction of FoxP3+ CCR8+ EBs is dependent upon CCL1 gradients which mediate cell proliferation, migration and invasion of mTregs. The identification of EBs and novel FoxP3+ CCR8+ regulatory T cells (mTregs) for selective conversion and isolation of bone marrow derived MSCs offers novel avenues for research, diagnosis and treatment.