Umbilical cord‐mesenchymal stem cells (UC‐MSCs)‐derived exosomes have been considered as an effective treatment for ischemic stroke. CircRNA BBS2 (circBBS2) was demonstrated to be down‐regulated in patients with ischemic stroke. However, the role of UC‐MSCs‐derived exosomal circBBS2 in ischemic stroke and potential mechanisms remain unclear. Hypoxia/reperfusion (H/R)‐exposed SH‐SY5Y cells and middle cerebral artery occlusion (MCAO)‐treated rats were served as in vitro and in vivo models of ischemic stroke. Target gene expression was detected by qRT–PCR. Cell viability was assessed by MTT assay. Ferroptosis was determined by iron, MDA, GSH, and lipid ROS levels. Protein levels were measured by Western blotting. The target relationships among circBBS2, miR‐494, and SLC7A11 were validated by RNA‐pull down, RIP, and dual‐luciferase reporter assays. TTC and HE staining were performed to evaluate cerebral infarction volume and neuropathological changes. circBBS2 was lowly expressed and ferroptosis was triggered in MCAO rats and H/R‐stimulated SH‐SY5Y cells. UC‐MSCs‐derived exosomes enhanced cell viability and restrained ferroptosis via increasing circBBS2 expression in SH‐SY5Y cells. Mechanistically, circBBS2 sponged miR‐494 to enhance the SLC7A11 level. Knockdown of miR‐494 or SLC7A11 reversed the effects of silencing circBBS2 or miR‐494 on ferroptosis of SH‐SY5Y cells, respectively. Furthermore, UC‐MSCs‐derived exosomes attenuated ischemic stroke in rats via delivering circBBS2 to inhibit ferroptosis. UC‐MSCs‐derived exosomal circBBS2 enhanced SLC7A11 expression via sponging miR‐494, therefore repressing ferroptosis and relieving ischemic stroke. Our findings shed light on a novel mechanism for UC‐MSCs‐derived exosomes in the treatment of ischemic stroke.