We have established early‐gestation chorionic villus–derived placenta mesenchymal stromal cells (PMSCs) as a potential treatment for spina bifida (SB), a neural tube defect. Our preclinical studies demonstrated that PMSCs have the potential to cure hind limb paralysis in the fetal lamb model of SB via a paracrine mechanism. PMSCs exhibit neuroprotective function by increasing cell number and neurites, as shown by indirect coculture and direct addition of PMSC‐conditioned medium to the staurosporine‐induced apoptotic human neuroblastoma cell line, SH‐SY5Y. PMSC‐conditioned medium suppressed caspase activity in apoptotic SH‐SY5Y cells, suggesting that PMSC secretome contributes to neuronal survival after injury. As a part of PMSC secretome, PMSC exosomes were isolated and extensively characterized; their addition to apoptotic SH‐SY5Y cells mediated an increase in neurites, suggesting that they exhibit neuroprotective function. Proteomic and RNA sequencing analysis revealed that PMSC exosomes contain several proteins and RNAs involved in neuronal survival and development. Galectin 1 was highly expressed on the surface of PMSCs and PMSC exosomes. Preincubation of exosomes with anti‐galectin 1 antibody decreased their neuroprotective effect, suggesting that PMSC exosomes likely impart their effect via binding of galectin 1 to cells. Future studies will include in‐depth analyses of the role of PMSC exosomes on neuroprotection and their clinical applications.—Kumar, P., Becker, J. C., Gao, K., Carney, R. P., Lankford, L., Keller, B. A., Herout, K., Lam, K. S., Farmer, D. L., Wang, A. Neuroprotective effect of placenta‐derived mesenchymal stromal cells: role of exosomes. FASEB J. 33, 5836–5849 (2019). http://www.fasebj.org