Spinal cord injury (SCI) is a devastating trauma that leads to irreversible motor and sensory dysfunction and is, so far, without effective treatment. Recently, however, nano-sized extracellular vesicles derived from preconditioned mesenchymal stem cells (MSCs) have shown great promise in treating various diseases, including SCI. In this study, we investigated whether extracellular vesicles (MEVs) derived from MSCs pretreated with melatonin (MT), which is well-recognized to be useful in treating diseases, including Alzheimer’s disease, nonsmall cell lung cancer, acute ischemia-reperfusion liver injury, chronic kidney disease and SCI, are better able to promote functional recovery in mice after SCI than extracellular vesicles derived from MSCs without preconditioning (EVs). MEVs were found to facilitate motor behavioral recovery more than EVs and to increase microglia/macrophages polarization from M1-like to M2-like in mice. Experiments in BV2 microglia and RAW264.7 macrophages confirmed that MEVs facilitate M2-like polarization, and also showed that they reduce production of reactive oxygen species (ROS) and regulate mitochondrial function. Proteomics analysis revealed that ubiquitin-specific protease 29 (USP29) was markedly increased in MEVs, and knockdown of USP29 in MEVs (shUSP29-MEVs) abolished MEVs-mediated benefits in vitro and in vivo. We then showed that USP29 interacts with, deubiquitinates, and therefore, stabilizes nuclear factor-like 2 (NRF2), thereby regulating microglia/macrophages polarization. In NRF2 knockout mice, MEVs failed to promote functional recovery and M2-like microglia/macrophages polarization. We also showed that MT reduced global N6-methyladenosine (m6A) modification and levels of the m6A “writer” methyltransferase-like 3 (METTL3). The stability of USP29 mRNA in MSCs was enhanced by treatment with MT, but inhibited by overexpression of METTL3. This study describes a very promising extracellular vesicle-based approach for treating SCI.