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Background: Hypoxia is a major cause of beta cell death and dysfunction after transplantation. The aim of this study was to investigate the effect of exosomes derived from mesenchymal stem cells (MSCs) on beta cells under hypoxic conditions and the potential underlying mechanisms. Methods: Exosomes were isolated from the conditioned medium of human umbilical cord MSCs and identified by WB, NTA, and transmission electron microscopy. Beta cells (βTC-6) were cultured in serum-free medium in the presence or absence of exosomes under 2% oxygen conditions. Cell viability and apoptosis were analysed with a CCK-8 assay and a flow cytometry-based annexin V-FITC/PI apoptosis detection kit, respectively. Endoplasmic reticulum stress (ER stress) proteins and apoptosis-related proteins were detected by the WB method. MiRNAs contained in MSC exosomes were determined by Illumina HiSeq, and treatment with specific miRNA mimics or inhibitors of the most abundant miRNAs was used to reveal the underlying mechanism of exosomes. Results: Exosomes derived from MSC-conditioned culture medium were 40–100 nm in diameter and expressed the exosome markers CD9, CD63, CD81, HSP70, and Flotillin 1, as well as the MSC markers CD73, CD90, and CD105. Hypoxia significantly induced beta cell apoptosis, while MSC exosomes remarkably improved beta cell survival. The WB results showed that ER stress-related proteins, including GRP78, GRP94, p-eIF2α and CHOP, and the apoptosis-related proteins cleaved caspase 3 and PARP, were upregulated under hypoxic conditions but were inhibited by MSC exosomes. Moreover, the p38 MAPK signalling pathway was activated by hypoxia and was inhibited by MSC exosomes. The Illumina HiSeq results show that MSC exosomes were rich in miR-21, let-7 g, miR-1246, miR-381, and miR-100. After transfection with miRNA mimics, the viability of beta cells under hypoxia was increased significantly by miR-21 mimic, and the p38 MAPK and ER stress-related proteins in beta cells were downregulated. These changes were reversed after exosomes were pretreated with miR-21 inhibitor. Conclusions: Exosomes derived from MSCs could protect beta cells against apoptosis induced by hypoxia, largely by carrying miR-21, alleviating ER stress and inhibiting p38 MAPK signalling. This result indicated that MSC exosomes might improve encapsulated islet survival and benefit diabetes patients. [ABSTRACT FROM AUTHOR]