Cerebral palsy (CP) is a permanent motor disorder that results from brain injury and neuroinflammation during the perinatal period. Mesenchymal stromal cells (MSCs) have been explored as a therapy in multiple adult neuroinflammatory conditions. Our study examined the therapeutic benefits of intranasal delivery of human umbilical cord tissue (UC) derived-MSCs in a rat model of neonatal hypoxic–ischemic (HI) brain injury. To do this, HI was performed on postnatal day 10 Sprague-Dawley rat pups via permanent ligation of the left carotid artery, followed by a hypoxic challenge of 8% oxygen for 90 min. A total of 200,000 UC-MSCs (10 million/kg) were administered intranasally 24 h post-HI. Motor control was assessed after seven days, followed by post-mortem. Analysis included brain immunohistochemistry, gene analysis and serum cytokine measurement. Neonatal HI resulted in brain injury with significant loss of neurons, particularly in the hippocampus. Intranasal administration of UC-MSCs significantly reduced the loss of brain tissue and increased the number of hippocampal neurons. HI significantly upregulated brain inflammation and expression of pro-inflammatory cytokines, while intranasal UC-MSCs significantly reduced markers of neuroinflammation. This study demonstrated that a clinically relevant dose (10 million/kg) of UC-MSCs was neuroprotective following HI by restoring neuronal cell numbers and reducing brain inflammation. Therefore, intranasal delivery of UC-MSCs may be an effective therapy for neonatal brain injury.