Periodontitis is a prevalent and progressive detrimental disease which is characterized by chronic inflammation, the immunopathological mechanisms being not yet fully understood. Mesenchymal stem cells (MSCs) play crucial roles as immunoregulators and maintain tissue homeostasis and regeneration, but their in vivo function in immunopathology and periodontal tissue deterioration is still unclear. Here, we utilized multiple transgenic mouse models to specifically mark, ablate and modulate Gli1+ cells, a critical and representative subset of MSCs in the periodontium, to explore their specific role in periodontal immunopathology. We reveal that Gli1+ cells, upon challenging by an inflammatory microenvironment, significantly induce rapid trafficking and aberrant activation of neutrophils thus exacerbating alveolar bone resorption. Mechanistically, extracellular vesicles (EVs) released by Gli1+ cells act as crucial immune regulators in the periodontal tissue, mediating the recruitment and activation of neutrophils through increased generation of reactive oxygen species and trigger of the nuclear factor kappa-B signaling. Importantly, specific inhibition of EV release from Gli1+ cells or pharmacological therapy using GANT61 ameliorates periodontal inflammation and alveolar bone loss. Collectively, our findings identify previously unrecognized roles of Gli1+ cells in orchestrating infiltration and priming aberrant activation of neutrophils under inflammation, which provide pathological insights and potential therapeutic targets for periodontitis.