Summary Background Mesenchymal stem cells (MSCs) have multiple immunomodulatory properties and hold therapeutic potential for inflammatory diseases. However, the therapeutic and immunologic effects of human umbilical cord blood‐derived MSCs (huMSCs) remain largely unexamined for asthma. Objective This study was to investigate the immunomodulatory properties of huMSCs in an ovalbumin (OVA)‐induced murine asthma model. Methods Mice were injected intraperitoneally with OVA and an aluminium hydroxide adjuvant. huMSCs were administered via the tail vein (5×105 cells/100 uL) to female BALB/c mice prior to the initial OVA challenge. The effects of huMSCs were assessed by investigating airway hyperresponsiveness, histological changes, inflammatory cell numbers, serum allergen‐specific antibodies, cytokine production in spleen, lung tissue, and bronchoalveolar lavage (BAL) fluid as well as expansion of regulatory T cells. Results Administration of huMSCs significantly reduced methacholine bronchial hyperresponsiveness and eosinophil counts in BAL cells. Similarly, there was a significant decrease in serum OVA‐specific IgE and IgG1 levels along with Th2 cytokine production (IL‐4, IL‐5, and IL‐13) in the lung and spleen tissues, whereas increased percentage of regulatory T cells was observed after treatment with huMSCs. Conclusions Our results suggest that huMSC treatment reduces OVA‐induced allergic inflammation, which could be mediated by regulatory T cells.