Several studies have demonstrated that human umbilical cord blood-derived mesenchymal stem cells can promote neural regeneration following brain injury. However, the therapeutic effects of human umbilical cord blood-derived mesenchymal stem cells in guiding peripheral nerve regeneration remain poorly understood. This study was designed to investigate the effects of human umbilical cord blood-derived mesenchymal stem cells on neural regeneration using a rat sciatic nerve crush injury model. Human umbilical cord blood-derived mesenchymal stem cells (1 × 106) or a PBS control were injected into the crush-injured segment of the sciatic nerve. Four weeks after cell injection, brain-derived neurotrophic factor and tyrosine kinase receptor B mRNA expression at the lesion site was increased in comparison to control. Furthermore, sciatic function index, Fluoro Gold-labeled neuron counts and axon density were also significantly increased when compared with control. Our results indicate that human umbilical cord blood-derived mesenchymal stem cells promote the functional recovery of crush-injured sciatic nerves.