Clinical expansion of mesenchymal stem cells (MSCs) is hampered by the lack of knowledge regarding how to prevent MSC apoptosis and promote their proliferation in serum-free medium. Our in vitro studies demonstrated that human umbilical cord MSCs (HUCMSCs) underwent apoptosis in the serum-free medium. When HUCMSCs were co-cultured with retinal pigment epithelial cells (ARPE19), however, HUCMSCs exhibited normal growth and morphology in serum-free medium. Their colony formation was promoted by the conditioned medium (CM) of ARPE19 cells on Matrigel. Proteomics analysis showed that pigment epithelium-derived factor (PEDF) was one of the most abundant extracellular proteins in the ARPE19 CM, whereas enzyme-linked immunosorbent assay confirmed that large amounts of PEDF was secreted from ARPE19 cells. Adding anti-PEDF-blocking antibodies to the co-culture of HUCMSCs with ARPE19 cells increased apoptosis of HUCMSCs. Conversely, treatment with PEDF significantly reduced apoptosis and increased proliferation of HUCMSCs in serum-free medium. PEDF was further demonstrated to exert this anti-apoptotic effect by inhibiting P53 expression to suppress caspase activation. In vivo studies demonstrated that co-injection of HUCMSCs with ARPE19 cells in immunocompromised NOD-SCID mice also increased survival and decreased apoptosis of HUCMSCs. PEDF also showed no negative effect on the mesoderm differentiation capability of HUCMSCs. In conclusion, this study is the first to demonstrate that PEDF promotes HUCMSC proliferation and protects them from apoptosis by reducing p53 expression in the serum-free medium. This study provides crucial information for clinical-scale expansion of HUCMSCs.