Traumatic spinal cord injury (SCI) is a highly destructive disease in human neurological functions. Adipose‐derived mesenchymal stem cells (ADMSCs) have tissue regenerations and anti‐inflammations, especially with prion protein overexpression (PrPcOE). Therefore, this study tested whether PrPcOE‐ADMSCs therapy offered benefits in improving outcomes via regulating nod‐like‐receptor‐protein‐3 (NLRP3) inflammasome/DAMP signalling after acute SCI in rats. Compared with ADMSCs only, the capabilities of PrPcOE‐ADMSCs were significantly enhanced in cellular viability, anti‐oxidative stress and migration against H2O2 and lipopolysaccharide damages. Similarly, PrPcOE‐ADMSCs significantly inhibited the inflammatory patterns of Raw264.7 cells. The SD rats (n = 32) were categorized into group 1 (Sham‐operated‐control), group 2 (SCI), group 3 (SCI + ADMSCs) and group 4 (SCI + PrPcOE‐ADMSCs). Compared with SCI group 2, both ADMSCs and PrPcOE‐ADMSCs significantly improved neurological functions. Additionally, the circulatory inflammatory cytokines levels (TNF‐α/IL‐6) and inflammatory cells (CD11b/c+/MPO+/Ly6G+) were highest in group 2, lowest in group 1, and significantly higher in group 3 than in group 4. By Day 3 after SCI induction, the protein expressions of inflammasome signalling (HGMB1/TLR4/MyD88/TRIF/c‐caspase8/FADD/p‐NF‐κB/NEK7/NRLP3/ASC/c‐caspase1/IL‐ß) and by Day 42 the protein expressions of DAMP‐inflammatory signalling (HGMB1/TLR‐4/MyD88/TRIF/TRAF6/p‐NF‐κB/TNF‐α/IL‐1ß) in spinal cord tissues displayed an identical pattern as the inflammatory patterns. In conclusion, PrPcOE‐ADMSCs significantly attenuated SCI in rodents that could be through suppressing the inflammatory signalling.