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Abstract Background Acute respiratory distress syndrome (ARDS) is the devastating complication of the new COVID-19 pandemic, directly correlated with releasing large amounts of inflammatory cytokines. Due to their immunoregulatory features, mesenchymal stromal cells (MSCs) provide a promising approach against this disease. In this regard, this study was designed as a single-center, open-label, phase 1 clinical trial with a control group to examine the safety and explore the possible potency of three injections of umbilical cord-derived MSCs (UC-MSCs) in mild–moderate COVID-19-induced ARDS patients. Methods Twenty confirmed COVID-19 patients with mild-to-moderate ARDS degree entered the study and were divided into two groups: control group (standard care) and intervention group (standard care + UC-MSCs). The patients received three intravenous infusions of UC-MSCs (1 × $${10}^{6}$$ 10 6 cells/kg BW per injection) every other day. Respiratory markers, CRP levels and specific serum cytokines were assessed four times (days of 0, 5, 10 and 17) during the 17-day follow-up period. Results During the study, there were no serious adverse effects after cell transplantations. Besides, significant improvement in SPO2/FIO2 ratio and serum CRP levels was observed. On the other hand, a significant decrease (P