Background/Aims: Neurotoxic A1 astrocytes are induced by inflammation after spinal cord injury (SCI), and the inflammation-related Nuclear Factor Kappa B (NFκB) pathway may be related to A1-astrocyte activation. Mesenchymal stem cell (MSC) transplantation is a promising therapy for SCI, where transplanted MSCs exhibit anti-inflammatory effects by downregulating proinflammatory factors, such as Tumor Necrosis Factor (TNF)-α and NFκB. MSC-exosomes (MSC-exo) reportedly mimic the beneficial effects of MSCs. Therefore, in this study, we investigated whether MSCs and MSC-exo exert inhibitory effects on A1 astrocytes and are beneficial for recovery after SCI. Methods: The effects of MSC and MSC-exo on SCIinduced A1 astrocytes, and the potential mechanisms were investigated in vitro and in vivo using immunofluorescence and western blot. In addition, we assessed the histopathology, levels of proinflammatory cytokines and locomotor function to verify the effects of MSC and MSC-exo on SCI rats. Results: MSC or MSC-exo co-culture reduced the proportion of SCIinduced A1 astrocytes. Intravenously-injected MSC or MSC-exo after SCI significantly reduced the proportion of A1 astrocytes, the percentage of p65 positive nuclei in astrocytes, and the percentage of TUNEL-positive cells in the ventral horn. Additionally, we observed decreased lesion area and expression of TNFα, Interleukin (IL)-1α and IL-1β, elevated expression of Myelin Basic Protein (MBP), Synaptophysin (Syn) and Neuronal Nuclei (NeuN), and improved Basso, Beattie & Bresnahan (BBB) scores and inclined-plane-test angle. In vitro assay showed that MSC and MSC-exo reduced SCI-induced A1 astrocytes, probably via inhibiting the nuclear translocation of the NFκB p65. Conclusion: MSC and MSC-exo reduce SCI-induced A1 astrocytes, probably via inhibiting nuclear translocation of NFκB p65, and exert antiinflammatory and neuroprotective effects following SCI, with the therapeutic effect of MSCexo comparable with that of MSCs when applied intravenously.