The immunomodulatory properties of human amnion epithelial cells (hAECs) have been previously described in several disease models. We previously reported on the ability of hAECs to influence macrophage phenotype and chemotaxis. In this study, we aim to elucidate the contribution of regulatory T cells (Tregs) to macrophage polarisation and downstream effects on inflammation and fibrosis in a bleomycin model of lung injury. Either CD45(+)/FoxP3(+) Tregs or CD45(+)/FoxP3 (-) non-Tregs were adoptively transferred into Rag1 (-/-) mice immediately prior to bleomycin challenge. Four million hAECs were administered 24 hours later. Outcomes were measured 7 or 14 days later. Mitigation of lung inflammation and fibrosis was observed only in animals that received both hAECs and Tregs. hAEC treatment also induced the maturation of non-Tregs into FoxP3-expressing Tregs. This event was found to be transforming growth factor-beta (TGFβ)-dependent. Furthermore, polarisation of macrophages from M1 to M2 occurred only in animals that received hAECs and Tregs. This study provides the first evidence that Tregs are required for hAEC-mediated macrophage polarisation and consequential mitigation of bleomycin-induced lung injury. Uncovering the interactions between hAECs, macrophages, and T-cell subsets is central to understanding the mechanisms by which hAECs elicit lung repair.