Umbilical cord blood (UCB) has recently been recognized as a new source of mesenchymal stem cells (MSCs) for use in stem cell therapy. We studied the effects of systemic injection of human UCB-MSCs and their conditioned medium (CM) on ovariectomy (OVX)-induced bone loss in nude mice. Ten-week-old female nude mice were divided into six groups: Sham-operated mice treated with vehicle (Sham-Vehicle), OVX mice subjected to UCB-MSCs (OVX-MSC), or human dermal fibroblast (OVX-DFB) transplantation, OVX mice treated with UCB-MSC CM (OVX-CM), zoledronate (OVX-Zol), or vehicle (OVX-Vehicle). Although the OVX-Vehicle group exhibited significantly less bone mineral density (BMD) gain compared with the Sham-Vehicle group, transplantation of hUCB-MSCs (OVX-MSC group) has effectively prevented OVX-induced bone mass attenuation. Notably, the OVX-CM group also showed BMD preservation comparable to the OVX-MSC group. In addition, microcomputed tomography analysis demonstrated improved trabecular parameters in both the OVX-MSC and OVX-CM groups compared to the OVX-Vehicle or OVX-DFB group. Histomorphometric analysis showed increased bone formation parameters, accompanied by increased serum procollagen type-I N-telopeptide levels in OVX-MSC and OVX-CM mice. However, cell-trafficking analysis failed to demonstrate engraftment of MSCs in bone tissue 48 h after cell infusion. In vitro, hUCB-MSC CM increased alkaline phosphatase (ALP) activity in human bone marrow-derived MSCs and mRNA expression of collagen type 1, Runx2, osterix, and ALP in C3H10T1/2 cells. Furthermore, hUCB-MSC CM significantly increased survival of osteocyte-like MLO-Y4 cells, while it inhibited osteoclastic differentiation. To summarize, transplantation of hUCB-MSCs could effectively prevent OVX-mediated bone loss in nude mice, which appears to be mediated by a paracrine mechanism rather than direct engraftment of the MSCs.