ABSTRACT Myelomeningocele (MMC) is the most severe form of spina bifida (SB) and the most common congenital cause of lifelong paralysis in the United States, where approximately four children are born daily with this devastating disease. MMC results from the incomplete closure of the neural tube and absent overlying spine leaving the spinal cord exposed to intrauterine mechanical and chemical trauma. This trauma results in lifelong paralysis, bowel and bladder dysfunction, musculoskeletal deformities, and cognitive disabilities due to hindbrain herniation. In utero surgical repair improves morbidity, but functional recovery is incomplete and the majority of children are still unable to walk independently. We developed a treatment for MMC that augments the standard of care, in utero MMC surgical repair, with placental mesenchymal stromal/stem cells (PMSCs). We found that treatment with PMSCs, during in utero repair, prevents hind limb paralysis in the well-established fetal ovine model of MMC, due to PMSC paracrine secretion of neuroprotective factors. However, we confirmed that PMSCs did not engraft long-term and treated lambs developed severe kyphosis causing spinal cord compression and tethering due to the lack of bone and adjacent paraspinal muscles, which is consistent with human MMC musculoskeletal deformities. To meet this need for a long-lasting therapy for MMC, we explored the use of bioengineered multifunctional combination scaffolds. Exosomes are extracellular vesicles that play significant roles in cell-to cell communication. We confirmed that exosomes secreted by PMSCs (PMSC-exosomes) exert significant neuroprotective functions, similar in magnitude to the live PMSCs from which they are derived. In this study, we propose to develop an engineered hydrogel system that will allow for both local and sustained release of PMSC-exosomes to the spinal cord, which in turn will provide sustained neuroprotection to treat MMC before birth. In addition, we aim to increase the longevity of the in utero treatment by covering the defect with a biomaterial-based bony scaffold to provide structural and functional support. We plan to optimize the neuroprotective and regenerative functions of the bioscaffold using our well-established fetal rodent and rabbit models of MMC. We will evaluate the final combination multifunctional bioscaffold product in our gold-standard fetal ovine model of MMC. This therapeutic will be cell-free, off-the-shelf, and easy-to-use. If successful, this novel approach will be used to treat MMC before birth, and due to its regenerative qualities, the treatment will improve the quality of life of these patients, as well as significantly lower the healthcare costs associated with the current treatment.