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Summary: Background: The long-term consequences of human umbilical cord-derived mesenchymal stem cell (UC-MSC) treatment for COVID-19 patients are yet to be reported. This study assessed the 1-year outcomes in patients with severe COVID-19, who were recruited in our previous UC-MSC clinical trial. Methods: In this prospective, longitudinal, cohort study, 100 patients enrolled in our phase 2 trial were prospectively followed up at 3-month intervals for 1 year to evaluate the long-term safety and effectiveness of UC-MSC treatment. The primary endpoint was an altered proportion of whole-lung lesion volumes measured by high-resolution CT. Other imaging outcomes, 6 min walking distance (6-MWD), lung function, plasma biomarkers, and adverse events were also recorded and analyzed. This trial was registered with ClinicalTrials.gov (NCT04288102). Findings: MSC administration improved in whole-lung lesion volume compared with the placebo with a difference of −10.8% (95% CI: −20.7%, −1.5%, p = 0.030) on day 10. MSC also reduced the proportion of solid component lesion volume compared with the placebo at each follow-up point. More interestingly, 17.9% (10/56) of patients in the MSC group had normal CT images at month 12, but none in the placebo group (p = 0.013). The incidence of symptoms was lower in the MSC group than in the placebo group at each follow-up time. Neutralizing antibodies were all positive, with a similar median inhibition rate (61.6% vs. 67.6%) in both groups at month 12. No difference in adverse events at the 1-year follow-up and tumor markers at month 12 were observed between the two groups. Interpretation: UC-MSC administration achieves a long-term benefit in the recovery of lung lesions and symptoms in COVID-19 patients. Funding: The National Key R&D Program of China, the Innovation Groups of the National Natural Science Foundation of China, and the National Science and Technology Major Project.