Transmural skip lesions are pathognomonic for Crohn's disease (CD). Despite advances toward CD treatment, disease recurrence remains a problem. CD requires novel therapies to modulate localized intestinal inflammation and promote intestinal epithelium healing. Human neonatal cardiac‐derived mesenchymal stem cells (nMSCs) demonstrate immune cell modulation accompanied by improved cardiac function recovery in myocardial infarction models. In the established CD‐like ileitis SAMP mouse model, direct skip lesion injection of nMSCs prevents ileal skip lesion growth and significantly down‐regulates the pro‐inflammatory milieu. Significant reduction in the percentage of skip lesion CD68+ macrophages (M1 Mφ, pro‐inflammatory) accompanied by an increase of CD206+ macrophages (M2 Mφ, anti‐inflammatory/pro‐regenerative) is observed in skip lesions following nMSCs injection compared to non‐injected and placebo controls (p < 0.05). Skip lesion size is significantly reduced along with pro‐inflammatory cytokines IFN‐y and TNF‐α, with an increase in intestinal tissue anti‐inflammatory cytokine IL‐10 production. nMSCs are also retained within skip lesions 5 weeks post‐treatment. nMSC administration promotes wound remodeling by modulating inflammatory immune cells and by increasing small bowel gastrointestinal transit with concomitant decreased segment gross pathology score compared to placebo control. Data from this study demonstrate that direct injection of nMSCs into ileal skip lesions attenuates inflammation and improves intestinal physiology.