Lipopolysaccharide (LPS) is a pertinent deleterious factor in oral microenvironment for cells which are carriers of regenerative processes. The aim of this study was to investigate the emerging in vitro effects of LPS (Escherichia coli) on human periodontal ligament stem cell (PDLSC) functions and associated signaling pathways. We demonstrated that LPS did not affect immunophenotype, proliferation, viability, and cell cycle of PDLSCs. However, LPS modified lineage commitment of PDLSCs inhibiting osteogenesis by downregulating Runx2, ALP, and Ocn mRNA expression, while stimulating chondrogenesis and adipogenesis by upregulating Sox9 and PPARγ mRNA expression. LPS promoted myofibroblast‐like phenotype of PDLSCs, since it significantly enhanced PDLSC contractility, as well as protein and/or gene expression of TGF‐β, fibronectin (FN), α‐SMA, and NG2. LPS also increased protein and gene expression levels of anti‐inflammatory COX‐2 and pro‐inflammatory IL‐6 molecules in PDLSCs. Inhibition of peripheral blood mononuclear cells (MNCs) transendothelial migration in presence of LPS‐treated PDLSCs was accompanied by the reduction of CD29 expression within MNCs. However, LPS treatment did not change the inhibitory effect of PDLSCs on mitogen‐stimulated proliferation of CD4+ and the ratio of CD4+CD25high/CD4+CD25low lymphocytes. LPS‐treated PDLSCs did not change the frequency of CD34+ and CD45+ cells, but decreased the frequency of CD33+ and CD14+ myeloid cells within MNCs. Moreover, LPS treatment attenuated the stimulatory effect of PDLSCs on CFC activity of MNCs, predominantly the CFU‐GM number. The results indicated that LPS‐activated ERK1,2 was at least partly involved in the observed effects on PDLSC differentiation capacity, acquisition of myofibroblastic attributes, and changes of their immunomodulatory features. In this study, we examined functional properties of human periodontal ligament stem cells (PDLSCs) in presence of LPS (E. coli). Our results indicated that LPS modified PDLSCs’ mesodermal lineage commitment, favoring myofibroblastic‐like phenotype, without affecting their growth and immunophenotype. LPS‐treated PDLSCs strongly inhibited transendothelial migration (TEM) of human peripheral blood mononuclear cells (MNCs). LPS‐treated PDLSCs decreased the frequency of CD33+ and CD14+ myeloid cells within MNCs. Moreover, LPS treatment attenuated the stimulatory effect of PDLSCs on CFC activity, predominantly the CFU‐GM number, of MNCs. Our results indicate that changes in differentiation and immunomodulatory properties of PDLSCs may be in partly governed by LPS‐activated ERK1,2 signaling cascade.