<b><i>Purpose:</i></b> This study was aimed to investigate the safety and feasibility of umbilical cord-derived mesenchymal stem cell (MSC) transplantation in patients with traumatic optic neuropathy (TON). <b><i>Methods:</i></b> This is a single-center, prospective, open-labeled phase 1 study that enrolled 20 patients with TON. Patients consecutively underwent either optic canal decompression combined with MSC local implantation treatment (group 1) or only optic canal decompression (group 2). Patients were evaluated on the first day, seventh day, first month, third month, and sixth month postoperatively. Adverse events, such as fever, urticarial lesions, nasal infection, and death, were recorded at each visit. The primary outcome was changes in best-corrected visual acuity. The secondary outcomes were changes in color vision, relative afferent pupillary defect, and flash visual evoked potential. <b><i>Results:</i></b> All 20 patients completed the 6-month follow-up. None of them had any systemic or ocular complications. The change in best-corrected visual acuity at follow-up was not significantly different between group 1 and group 2 (<i>p</i> > 0.05); however, group 1 showed better visual outcome than group 2. Both groups showed significant improvements in vision compared with the baseline (<i>p</i> < 0.05); however, there were no statistically significant differences between the groups (<i>p</i> > 0.05). In addition, no adverse events related to local transplantation were observed in the patients. <b><i>Conclusions:</i></b> A single, local MSC transplantation in the optic nerve is safe for patients with TON.