Intracavernous (IC) injections of stem cells has been shown to ameliorate cavernous nerve (CN)-induced erectile dysfunction (ED). However, the regenerative effects underlying the recovery of erectile function (EF) in human amniotic fluid-derived stem cells (hAFSCs) remain unclear. In the bilateral cavernous nerve crushing (BCNC) injury rat paradigm, we sought to ascertain the effects of hAFSC treatment on EF recovery during the incipient phase. Three groups of 45 male rats were used in this study: sham (Group 1), saline IC injection after BCNC (Group 2), and hAFSC intracavernous injection (ICI) after BCNC (Group 3). hAFSCs from the fourth passage showed potential to differentiate into trilineage cells. All animals were subjected to EF analysis on the 28th day post-injection and tissues were retrieved for histopathological and immunohistochemical analyses. IC injections of hAFSC significantly improved EF parameters in BCNC-ED rats at 28 days post-injury. AFSC treatment enhanced the smooth muscle condition and increased the smooth muscle/collagen ratio, as evidenced by histological analysis. Immunohistology revealed increased expression of 𝛼-SMA andvWf in the corpus cavernosum and enhanced expression of nNOS in the dorsal penile nerve in BCNC-ED rats (p < 0.05). Western blotting showed that hAFSC treatment significantly increased α-SMA expression in the hAFSC group compared with that in the BCNC group. Electron microscopy revealed significantly elevated myelination in the CN (p < 0.05), maintenance of smooth muscle structures, and restoration of EF in BCNC-ED rats treated with hAFSC. hAFSC treatment increased EF in BCNC-ED rats at a single dose. As BCNC-ED resembles ED caused by radical prostatectomy (RP), this therapy has high potential for ED patients after RP surgery.