Abstract Neonatal (perinatal) arterial ischemic stroke is a major cause of long-term neurological and cognitive deficits, including cerebral palsy and neurodevelopmental disabilities. While neonatal stroke is as common as in the elderly, literature has emerged that the stage of brain development at the time of stroke has a major impact on the pathophysiological mechanisms of brain damage. Previous therapeutic efforts were mostly focused on protecting neurons acutely, but such strategies appeared to be short-range. We reported that delayed intranasal administration of mesenchymal stem cells (MSC) protects the white matter and improves long-term functional outcomes in an experimental model of a transient middle cerebral artery occlusion (tMCAO) in neonatal rats. Extracellular vesicles (EV) are now believed to play fundamental role in cell-cell communication without direct cell-cell contacts in healthy and diseased organism and that EV is a part of neurodegenerative scenarios. Based on our preliminary data that exosomes released from MSC (MSC-exo) protect neonatal brain following subacute stroke, in this proposal we hypothesize that MSC-exo is the underlying mechanism of MSC-induced acute neuroprotection and long-term recovery after neonatal stroke via modulation of microglial cell signaling. Given that inflammation is a hallmark of perinatal brain injury, affecting both early injury and brain repair and connectivity later in life, and that microglial cells contribute to neuro- and vasoprotection in neonatal stroke, we will determine how uptake of untranasally administered MSC-exo by activated microglia/macrophages in ischemic-reperfused regions affects neuroinflammation and injury in neonatal mice of both sexes subjected to tMCAO and whether MSC-exo alter brain microenvironment via release of microvesicles and small EV from microglia (Aim 1), and determine the long-term effects of MSC-exo administration on myelination, brain repair and functional outcomes (Aim 2). To understand the mechanistic role of MSC-exo and their therapeutic potential for neonatal stroke, we will utilize state- of-the art experimental tools, including a clinically relevant perinatal focal arterial stroke model that we invented, in conjunction with pharmacological approaches and advanced non-invasive imaging methodologies (NanoSight, super resolution flow cytometry Alexa) and characterization of large/small EV and their “cargo” released from microglia from injured regions. The significance and novelty of the proposed studies are in advancing the mechanistic understanding of MSC-exo-induced cell-type specific effects in neonatal brain after stroke and identifying novel therapeutic targets to create effective and safe therapy for neonatal stroke.