Background Liver injury associated with acute graft-versus-host disease (aGVHD) is a frequent and severe complication of hematopoietic stem cell transplantation and remains a major cause of transplant-related mortality. Bone marrow-derived mesenchymal stem cells (BM-MSCs) has been proposed as a potential therapeutic approach for aGVHD. However, the therapeutic effects are not always achieved. In this study, we genetically engineered C57BL/6 mouse BM-MSCs with AKT1 gene and tested whether AKT1-MSCs was superior to control MSCs (Null-MSCs) for cell therapy of liver aGVHD. Results In vitro apoptosis analyses showed that, under both routine culture condition and high concentration interferon-γ (IFN-γ) (100ng/mL) stimulation condition, AKT1-MSCs had a survival (anti-apoptotic) advantage compared to Null-MSCs. In vivo imaging showed that AKT1-MSCs had better homing capacity and longer persistence in injured liver compared to Null-MSCs. Most importantly, AKT1-MSCs demonstrated an enhanced immunomodulatory function by releasing more immunosuppressive cytokines, such as IL-10. Adoptive transfer of AKT1-MSCs mitigated the histopathological abnormalities of concanavalin A(ConA)-induced liver injury along with significantly lowered serum levels of ALT and AST. The attenuation of liver injury correlated with the decrease of TNF-α and IFN-γ both in liver tissue and in the serum. Conclusions In summary, BM-MSCs genetically modified with AKT1 has a survival advantage and an enhanced immunomodulatory function both in vitro and in vivo and thus demonstrates the therapeutic potential for prevention and amelioration of liver GVHD and other immunity-associated liver injuries.