Background: In our previous study, we achieved large-scale expansion of bone marrow-derived suppressor cells (MDSCs) derived from CD34+ cells cultured in human umbilical cord blood (hUCB) and demonstrated the immunomodulatory properties of these cells. This study aimed to assess the therapeutic efficacy of hUCB-MDSCs in the treatment of atopic dermatitis (AD). Methods: Dermatophagoides farinae (Df)-induced NC/Nga mice (clinical score of 7) were treated with hUCB-MDSCs or control drug. The mechanisms underlying the therapeutic effects of hUCB-MDSCs were evaluated using dermatitis scores, immunological parameters, skin histology, and skin barrier function analysis. Results: hUCB-MDSCs demonstrated immunosuppressive effects on both human and mouse CD4+ T cells. hUCB-MDSC administration significantly reduced the clinical severity scores and was associated with histopathological changes, such as reduced inflammatory cellular infiltration, epidermal hyperplasia, and fibrosis. hUCB-MDSC administration decreased the serum levels of IgE, IL-4, IL-5, IL-13, IL-17, thymus- and activation-regulated chemokine (TARC), and thymic stromal lymphopoietin (TSLP). Additionally, hUCB-MDSCs altered the expression of skin barrier function-related proteins such as filaggrin, involucrin, loricrin, and cytokeratin 10 and suppressed Df restimulated T-cell activation through cell–cell interactions. Furthermore, hUCB-MDSCs promote skin recovery and maintain their therapeutic effect even after recurrence. Conclusions: hUCB-MDSC administration improved Df-induced AD-like skin lesions and led to the restoration of skin barrier function. Furthermore, hUCB-MDSC treatment inhibited inflammatory responses and suppressed T-cell immune function. Therefore, the results of this study support the potential for hUCB-MDSCs as a novel treatment for AD.