Background and Objectives: Human mesenchymal stem cells (MSCs) are emerging as a treatment for atopic dermatitis (AD), a chronic inflammatory skin disorder that affects a large number of people across the world. Treatment of AD using human umbilical cord blood-derived MSCs (hUCB-MSCs) has recently been studied. However, the mechanism underlying their effect needs to be studied continuously. Thus, the objective of this study was to investigate the immunomodulatory effect of epidermal growth factor (EGF) secreted by hUCB-MSCs on AD. Methods: and Results: To explore the mechanism involved in the therapeutic effect of MSCs for AD, a secretome array was performed using culture medium of hUCB-MSCs. Among the list of genes common for epithelium development and skin diseases, we focused on the function of EGF. To elucidate the effect of EGF secreted by hUCB-MSCs, EGF was downregulated in hUCB-MSCs using EGF-targeting small interfering RNA. These cells were then co-cultured with keratinocytes, Th2 cells, and mast cells. Depletion of EGF disrupted immunomodulatory effects of hUCB-MSCs on these AD-related inflammatory cells. In a Dermatophagoides farinae-induced AD mouse model, subcutaneous injection of hUCB-MSCs ameliorated gross scoring, histopathologic damage, and mast cell infiltration. It also significantly reduced levels of inflammatory cytokines including interleukin (IL)-4, tumor necrosis factor (TNF)-α, thymus and activation-regulated chemokine (TARC), and IL-22, as well as IgE levels. These therapeutic effects were significantly attenuated at all evaluation points in mice injected with EGF-depleted hUCB-MSCs. Conclusions EGF secreted by hUCB-MSCs can improve AD by regulating inflammatory responses of keratinocytes, Th2 cells, and mast cells.