Rationale: Bronchopulmonary dysplasia, a chronic respiratory condition originating from preterm birth, is associated with abnormal neurodevelopment. Currently, there is an absence of effective therapies for bronchopulmonary dysplasia and its associated brain injury. In preclinical trials, mesenchymal stromal cell therapies demonstrate promise as a therapeutic alternative for bronchopulmonary dysplasia. Objectives: To investigate whether a multifactorial neonatal mouse model of lung injury perturbs neural progenitor cell function and to assess the ability of human umbilical cord-derived mesenchymal stromal cell extracellular vesicles to mitigate pulmonary and neurologic injury. Methods: Mice at Postnatal Day 7 or 8 were injected intraperitoneally with LPS and ventilated with 40% oxygen at Postnatal Day 9 or 10 for 8 hours. Treated animals received umbilical cord-mesenchymal stromal cell-derived extracellular vesicles intratracheally preceding ventilation. Lung morphology, vascularity, and inflammation were quantified. Neural progenitor cells were isolated from the subventricular zone and hippocampus and assessed for self-renewal, in vitro differentiation ability, and transcriptional profiles. Measurements and Main Results: The multifactorial lung injury model produced alveolar and vascular rarefaction mimicking bronchopulmonary dysplasia. Neural progenitor cells from lung injury mice showed reduced neurosphere and oligodendrocyte formation, as well as inflammatory transcriptional signatures. Mice treated with mesenchymal stromal cell extracellular vesicles showed significant improvement in lung architecture, vessel formation, and inflammatory modulation. In addition, we observed significantly increased in vitro neurosphere formation and altered neural progenitor cell transcriptional signatures. Conclusions: Our multifactorial lung injury model impairs neural progenitor cell function. Observed pulmonary and neurologic alterations are mitigated by intratracheal treatment with mesenchymal stromal cell-derived extracellular vesicles.