Macrophages are re-educated and polarized in response to myocardial infarction (MI). The M2 anti-inflammatory phenotype is a known dominator of late stage MI. Mesenchymal stem cells (MSCs) represent a promising tool for cell therapy, particularly heart related diseases. In general, MSCs induce alteration of the macrophage subtype from M1 to M2, both in vitro and in vivo. We conjectured that hypoxic conditions can promote secretome productivity of MSCs. Hypoxia induces TGF-β1 expression, and TGF-β1 mediates M2 macrophage polarization for anti-inflammation and angiogenesis in infarcted areas. We hypothesized that macrophages undergo advanced M2 polarization after exposure to MSCs in hypoxia. Treatment of MSCs derived hypoxic conditioned medium (hypo-CM) promoted M2 phenotype and neovascularization through the TGF-β1/Smad3 pathway. In addition, hypo-CM derived from MSCs improved restoration of ischemic heart, such as attenuating cell apoptosis and fibrosis, and ameliorating microvessel density. Based on our results, we propose a new therapeutic method for effective MI treatment using regulation of macrophage polarization. [BMB Reports 2020; 53(11): 600-604].