Background: Chorioamnionitis and fetal inflammation are principal causes of neuropathology detected after birth, particularly in very preterm infants. Preclinical studies show that umbilical cord blood (UCB) cells are neuroprotective, but it is uncertain if allogeneic UCB cells are a feasible early intervention for preterm infants. In contrast, mesenchymal stem cells (MSCs) are more readily accessible and show strong anti-inflammatory benefits. We aimed to compare the neuroprotective benefits of UCB versus MSCs in a large animal model of inflammation-induced preterm brain injury. We hypothesized that MSCs would afford greater neuroprotection. Methods: Chronically instrumented fetal sheep at 0.65 gestation received intravenous lipopolysaccharide (150 ng; 055:B5, n = 8) over 3 consecutive days; or saline for controls (n = 8). Cell-treated animals received 10 8 UCB mononuclear cells (n = 7) or 10 7 umbilical cord MSCs (n = 8), intravenously, 6 h after the final lipopolysaccharide dose. Seven days later, cerebrospinal fluid and brain tissue was collected for analysis. Results: Lipopolysaccharide induced neuroinflammation and apoptosis, and reduced the number of mature oligodendrocytes. MSCs reduced astrogliosis, but UCB did not have the same effect. UCB significantly decreased cerebral apoptosis and protected mature myelinating oligodendrocytes, but MSCs did not. Conclusion: UCB appears to better protect white matter development in the preterm brain in response to inflammation-induced brain injury in fetal sheep.