Human umbilical cord mesenchymal stem cell (UC-MSC) application is a promising arising therapy for the treatment of premature ovarian failure (POF). However, little is known about the inflammation regulatory effects of human umbilical cord MSCs (UC-MSCs) on chemotherapy-induced ovarian damage, regardless of in vivo or in vitro. This study was designed to investigate the therapeutic effects of UC-MSC transplantation and underlying mechanisms regarding both apoptosis and inflammation in POF mice. The chemotherapy-induced POF models were induced by intraperitoneal injection of cyclophosphamide. Ovarian function parameters, granulosa cell (GC) apoptosis, and inflammation were examined. Morphological staining showed that UC-MSC treatment increased the ovary size, and the numbers of primary and secondary follicles, but decreased the number of atretic follicles. Estradiol levels in the UC-MSC-treated group were increased while follicle-stimulating hormone levels were reduced compared to those in the POF group. UC-MSCs inhibited cyclophosphamide-induced GC apoptosis and inflammation. Meanwhile, phosphorylation of AKT and P38 was elevated after UC-MSC treatment. Tracking of UC-MSCs in vivo indicated that transplanted UC-MSCs were only located in the interstitium of ovaries rather than in follicles. Importantly, UC-MSC-derived extracellular vesicles protected GCs from alkylating agent-induced apoptosis and inflammation in vitro. Our results suggest that UC-MSC transplantation can reduce ovary injury and improve ovarian function in chemotherapy-induced POF mice through anti-apoptotic and anti-inflammatory effects via a paracrine mechanism.