Cell-based therapies, using multipotent mesenchymal stem cells (MSCs) for organ regeneration, are being pursued for cardiac disease, orthopedic injuries and biomaterial fabrication. The molecular pathways that regulate MSC-mediated regeneration or enhance their therapeutic efficacy are, however, poorly understood. We compared MSCs isolated from MRL/MpJ mice, known to demonstrate enhanced regenerative capacity, to those from C57BL/6 (WT) mice. Compared with WT-MSCs, MRL-MSCs demonstrated increased proliferation, in vivo engraftment, experimental granulation tissue reconstitution, and tissue vascularity in a murine model of repair stimulation. The MRL-MSCs also reduced infarct size and improved function in a murine myocardial infarct model compared with WT-MSCs. Genomic and functional analysis indicated a downregulation of the canonical Wnt pathway in MRL-MSCs characterized by significant up-regulation of specific secreted frizzled-related proteins (sFRPs). Specific knockdown of sFRP2 by shRNA in MRL-MSCs decreased their proliferation and their engraftment in and the vascular density of MRL-MSC-generated experimental granulation tissue. These results led us to generate WT-MSCs overexpressing sFRP2 (sFRP2-MSCs) by retroviral transduction. sFRP2-MSCs maintained their ability for multilineage differentiation in vitro and, when implanted in vivo, recapitulated the MRL phenotype. Peri-infarct intramyocardial injection of sFRP2-MSCs resulted in enhanced engraftment, vascular density, reduced infarct size, and increased cardiac function after myocardial injury in mice. These findings implicate sFRP2 as a key molecule for the biogenesis of a superior regenerative phenotype in MSCs.