The low efficacy of mesenchymal stem cells (MSCs) has restricted their application in the treatment of liver disease. Emerging evidence suggested that ferroptosis may provoke hepatocyte dysfunction and exacerbate damage to the liver microenvironment. Here, we have investigated the contribution of liver ferroptosis to the elimination and effectiveness of human MSC (hMSC). Furthermore, potential links between liver ferroptosis and aryl hydrocarbon receptors (AhR) were explored. Two mouse models, iron supplement-induced hepatic ferroptosis and hepatic ischaemia/reperfusion (I/R) injury, were used to identify effects of ferroptosis on hMSC pharmacokinetics (PK)/pharmacodynamics (PD). AhR inhibition attenuated hepatic ferroptosis and improved survival of hMSCs. hMSC viability was decreased by iron supplementation or serum from I/R mice. The AhR antagonist CH223191 reversed iron overload and oxidative stress induced by ferroptosis and increased hMSC concentration and efficacy in mouse models. Effects of CH223191 were greater than those of deferoxamine, a conventional ferroptosis inhibitor. Transcriptomic results suggested that the AhR-signal transducer and activator of transcription 3 (STAT3)-haem oxygenase 1/COX-2 signalling pathway is critical to this process. These results were confirmed in a mouse model of hepatic I/R injury. In mice pre-treated with CH223191, hMSC exhibited more potent protective effects, linked to decreased hepatic ferroptosis. Our findings showed that ferroptosis was a critical factor in determining the fate of hMSCs. Inhibition of AhR decreased hepatic ferroptosis, thereby increasing survival and therapeutic effects of hMSCs in mouse models of liver disease.