Retinal ischemia is a major cause of vision loss and impairment and a common underlying mechanism associated with diseases such as glaucoma, diabetic retinopathy, and central retinal artery occlusion. The regenerative capacity of the diseased human retina is limited. Our previous studies have shown the neuroprotective effects of intravitreal injection of mesenchymal stem cells (MSC) and MSC-conditioned medium in retinal ischemia in rats. Based upon the hypothesis that the neuroprotective effects of MSCs and conditioned medium are largely mediated by extracellular vesicles (EVs), MSC derived EVs were tested in an in-vitro oxygen-glucose deprivation (OGD) model of retinal ischemia. Treatment of R28 retinal cells with MSC-derived EVs significantly reduced cell death and attenuated loss of cell proliferation. Mechanistic studies on the mode of EV endocytosis by retinal cells were performed in vitro. EV endocytosis was dose- and temperature-dependent, saturable, and occurred via cell surface heparin sulfate proteoglycans mediated by the caveolar endocytic pathway. The administration of MSC-EVs into the vitreous humor 24 h after retinal ischemia in a rat model significantly enhanced functional recovery, and decreased neuro-inflammation and apoptosis. EVs were taken up by retinal neurons, retinal ganglion cells, and microglia. They were present in the vitreous humor for four weeks after intravitreal administration, with saturable binding to vitreous humor components. Overall, this study highlights the potential of MSC-EV as biomaterials for neuroprotective and regenerative therapy in retinal disorders.