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Abstract Background Oral ulcers are a common side effect of chemotherapy and affect patients’ quality of life. While stem cell transplantation is a potential treatment for oral ulcers, its efficacy is limited as the stem cells tend to remain in the affected area for a short time. This study aims to develop a treatment for oral ulcers by using trimethyl chitosan (TMC) hydrogel with human tonsil-derived stem cells (hTMSCs) to increase the therapeutic effect of stem cells and investigate their effectiveness. Methods Animals were divided into four experimental groups: Control, TMC hydrogel, hTMSCs, and hTMSCs loaded in TMC hydrogel (Hydrogel + hTMSCs) (each n = 8). Oral ulcers were chemically induced by anesthetizing the rats followed by injection of dilute acetic acid in the right buccal mucosa. After confirming the presence of oral ulcers in the animals, a single subcutaneous injection of 100 µL of each treatment was applied to the ulcer area. Histological analyses were performed to measure inflammatory cells, oral mucosal thickness, and fibrosis levels. The expression level of inflammatory cytokines was also measured using RT-PCR to gauge therapeutic the effect. Results The ulcer size was significantly reduced in the TMC hydrogel + hTMSCs group compared to the control group. The stem cells in the tissue were only observed until Day 3 in the hTMSCs treated group, while the injected stem cells in the TMC Hydrogel + hTMSCs group were still present until day 7. Cytokine analysis related to the inflammatory response in the tissue confirmed that the TMC Hydrogel + hTMSCs treated group demonstrated superior wound healing compared to other experimental groups. Conclusion This study has shown that the adhesion and viability of current stem cell therapies can be resolved by utilizing a hydrogel prepared with TMC and combining it with hTMSCs. The combined treatment can promote rapid healing of oral cavity wounds by enhancing anti-inflammatory effects and expediting wound healing. Therefore, hTMSC loaded in TMC hydrogel was the most effective wound-healing approach among all four treatment groups prolonging stem cell survival. However, further research is necessary to minimize the initial inflammatory response of biomaterials and assess the safety and long-term effects for potential clinical applications.