Mesenchymal stem cells (MSCs) have been shown to possess immunomodulatory properties. Systemic lupus erythematosus is an autoimmune disease that results in nephritis and subsequent destruction of renal microstructure. We investigated whether transplantation of human umbilical cord blood-derived MSCs (uMSCs) is useful in alleviating lupus nephritis in a murine model. It was found that uMSCs transplantation significantly delayed the development of proteinuria, decreased anti-dsDNA, alleviated renal injury, and prolonged the life span. There was a trend of decreasing T-helper (Th) 1 cytokines (IFN-γ, IL-2) and proinflammatory cytokines (TNF-α, IL-6, IL-12) and increasing Th2 cytokines (IL-4, IL-10). The in vitro coculture experiments showed that uMSCs only inhibited lymphocytes and splenocytes proliferation but not mesangial cells. Long-term engraftment of uMSCs in the kidney was not observed either. Together, these findings indicated that uMSCs were effective in decreasing renal inflammation and alleviating experimental lupus nephritis by inhibiting lymphocytes, inducing polarization of Th2 cytokines, and inhibition of proinflammatory cytokines production rather than direct engraftment and differentiating into renal tissue. Therapeutic effects demonstrated in this preclinical study support further exploration of the possibility to use uMSCs from mismatched donors in lupus nephritis treatment.