Abstract Body: Mesenchymal stem cells (MSCs) have recently received attention as an intervention to reverse or slow neurodegenerative, stroke and injury-related changes in the aging brain as they suppress inflammation and facilitate tissue repair. In support of this idea, we have shown that extracellular vesicles (EVs) derived from bone marrow MSCs enhance recovery of motor function of the hand following cortical injury in aged female rhesus monkeys. Specifically, EV-treated treated monkeys (n=5) exhibited full recovery of fine motor function by 3-5 weeks post-injury while vehicle monkeys (n=5) reached a plateau short of full recovery by 8-12 weeks post-injury. Post-mortem analyses of perilesional brain tissue from the same monkeys, revealed multifaceted cellular effects of EVs including downregulating inflammatory microglial phenotypes, dampening neuronal hyperexcitability, and enhancing neuronal and myelin plasticity. To explore the relationship between these processes and functional recovery, we utilized multi-labeling immunohistochemistry (IHC) and high-resolution confocal microscopy to assess microglia phenotypes, neuronal synaptic marker expression and microglia-neuronal interactions in perilesional cortex. To assess these markers, semi-quantitative stereology in Neurolucida and particle analysis in ImageJ were utilized. Results show that MSC-EV treatment decreased the densities of pro-inflammatory hypertrophic microglia expressing LN3+, a marker for MHC II receptors, upregulated with immune activation. Conversely, MSC-EV treatment and functional recovery was significantly correlated with increased proportion of hypertrophic microglia expressing the key complement pathway protein C1q, a phenotype associated with enhanced debris-clearance and repair after degeneration. Interestingly this EV-associated increase in C1q+ hypertrophic microglia was correlated with decreased putatively damaged synapses tagged with C1q and greater synaptic marker expression in perilesional cortex. These data suggest that MSC-EVs promote a shift from pro- to anti-inflammatory repair microenvironment, via enhancement of debris clearance after injury. These findings demonstrate the efficacy of MSC-EVs as a therapeutic, likely acting to reduce inflammatory cascades, facilitate repair and rebalance neuronal synaptic connections to support recovery after cortical injury.