Objective To investigate the therapeutic effect of hydroge-encapsulated human umbilical cord mesenchymal stem cells (hUC-MSCs) on traumatic brain injury in rats and its related mechanism.   Methods SD rat models of traumatic brain injury were constructed, which were divided into control group, chitosan group, stem cell group and combined treatment group.    Results During the treatment, there was no significant difference in mNSS score between the control group and the chitosan group (P>0.05). On the 15th, 22nd, 29th and 36th day, the mNSS score of the combined treatment group decreased most significantly than that of the control group, followed by the stem cell group(P<0.05). Compared with the control group, the escape latency of the combined treatment group decreased most significantly, followed by the stem cell group (P<0.05). The number of beta-Ⅲ tubulin-positive cells in the brain tissues of rats in the treatment group was significantly higher than that in the control group. Compared with the control group, there was no significant change in the expression of neuron-specific enolase (NSE), neuron-specific nuclear protein (NeuN), microtubule associated protein 2 (MAP2), brain-derived neurotrophic factor (BDNF) and B cell lymphoma-2 (Bcl-2) in the chitosan group (P>0.05), and the expression of related proteins in the stem cell group and the combined treatment group increased significantly. The expression level of the related protein in the combined treatment group was the highest, followed by stem cell group, the lowest in the control group and chitosan group (P<0.05).    Conclusion Compared with stem cell transplantation alone, hydrogel-encapsulated hUC-MSCs transplantation can improve the motor and learning and memory abilities of rats with traumatic brain injury more effectively.