The transplantation of human umbilical cord mesenchymal stem cells (hUC-MSCs) can promote hypoxic-ischemic brain damage (HIBD) nerve repair, but finding suitable seed cells to optimize transplantation and improve treatment efficiency is an urgent problem to be solved. In this study, we induced hUC-MSCs into dedifferentiated hUC-MSCs (De-hUC-MSCs), and the morphology, stem cell surface markers, proliferation and tri-directional differentiation ability of the De-hUC-MSCs and hUC-MSCs were detected. A whole-gene chip was utilized for genome cluster, gene ontology and KEGG pathway analyses of differentially expressed genes. De-hUC-MSCs were transplanted into HIBD rats, and behavioral experiments and immunofluorescence assays were used to assess the therapeutic effect. A lentivirus vector for human stromal cell-derived factor-1 (hSDF-1α) was constructed, and the role of hSDF-1α in the neuroprotective effect and mechanism of De-hUC-MSCs was verified. De-hUC-MSCs displayed similar cell morphology, stem cell surface marker expression, cell proliferation and even three-dimensional differentiation ability as hUC-MSCs but exhibited greater treatment potential in vivo. The reprogramming mechanism of hSDF-1α participated in the dedifferentiation process. By successfully constructing a stable hSDF-1α cell line, we found that De-hUC-MSCs might participate in nerve repair through the hSDF-1α/CXCR4/PI3K/Akt pathway. De-hUC-MSCs reprogramming of endogenous hSDF-1α expression may mediate the hSDF-1α/CXCR4/PI3K/Akt pathway involved in nerve repair in HIBD rats.