A moderate inflammatory response at the early stages of fracture healing is necessary for callus formation. Over-active and continuous inflammation, however, impairs fracture healing and leads to excessive tissue damage. Adequate fracture healing could be promoted through suppression of local over-active immune cells in the fracture site. In the present study, we achieved an enriched concentration of PD-L1 from exosomes (Exos) of a genetically engineered Human Umbilical Vein Endothelial Cell (HUVECs), and demonstrated that exosomes overexpressing PD-L1 specifically bind to PD-1 on the T cell surface, suppressing the activation of T cells. Furthermore, exosomal PD-L1 induced Mesenchymal Stem Cells (MSCs) towards osteogenic differentiation when pre-cultured with T cells. Moreover, embedding of Exos into an injectable hydrogel allowed Exos delivery to the surrounding microenvironment in a time-released manner. Additionally, exosomal PD-L1, embedded in a hydrogel, markedly promoted callus formation and fracture healing in a murine model at the early over-active inflammation phase. Importantly, our results suggested that activation of T cells in the peripheral lymphatic tissues was inhibited after local administration of PD-L1-enriched Exos to the fracture sites, while T cells in distant immune organs such as the spleen were not affected. In summary, this study provides the first example of using PD-L1-enriched Exos for bone fracture repair, and highlights the potential of Hydrogel@Exos systems for bone fracture therapy through immune inhibitory effects.