Inflammatory bowel disease (IBD), including ulcerative colitis and Crohn's disease, manifests as chronic intestinal inflammation with debilitating symptoms, posing a significant burden on global healthcare. Moreover, current therapies primarily targeting inflammation can lead to immunosuppression-related complications. Human amniotic epithelial stem cells (hAESCs), which exhibit low immunogenicity and ethical acceptability, have gained attention as potential therapeutics. In this study, it is demonstrated that their encapsulation in a hydrogel and administration via anal injection enhanced the colonic mucosal barrier repair in a murine colitis model induced by dextran sodium sulfate during the recovery phase. The underlying mechanism involved the release of exosomes from hAESCs enriched with microRNA-23a-3p, which post-transcriptionally reduced tumor necrosis factor receptor 1 expression, suppressing the nuclear factor-κB pathway in colonic epithelial cells, thus played a key role in inflammation. The novel approach shows potential for IBD treatment by restoring intestinal epithelial homeostasis without the immunosuppressive therapy-associated risks. Furthermore, the approach provides an alternative strategy to target the key molecular pathways involved in inflammation and promotes intestinal barrier function using hAESCs and their secreted exosomes. Overall, this study provides key insights to effectively treat IBD, addresses the unmet needs of patients, and reduces related healthcare burden.