Despite recent advances in the treatment of neonatal hypoxic-ischemic encephalopathy (HIE) using therapeutic hypothermia, at least 30% of the cooled infants will die or have moderate/severe neurological disability. Umbilical cord blood cells (UCBCs), which are readily available at birth, have been shown to reduce sensorimotor and/or cognitive impairments in several models of brain damage, representing a promising option for the treatment of neurological diseases. In this review, we discuss recent preclinical studies that assessed the effects of UCBC transplantation in the Rice-Vannucci animal model of HIE. We also review the possible cell types and mechanisms involved in the therapeutic effect of UCBC transplantation, including neuroprotection, immunomodulation, and stimulation of neural plasticity and regeneration. In addition, we discuss how neuroimaging methods, such as bioluminescence imaging, nuclear-medicine imaging, or magnetic resonance imaging, could be used to evaluate the biodistribution of UCBCs in both preclinical and clinical studies.