Neuroinflammation is the most common cause of neurological diseases. Exosomes derived from mesenchymal stem cells (MSCs-exos) have been reported to reduce inflammation and neuronal injury. Its underlying mechanism remains poorly unknown. In this study, identification of bone marrow MSCs-derived exosomes (BMSCs-exos) was conducted by nanosight tracking analysis, transmission electron microscope, and western blot assay. Enzyme-linked immunosorbent (ELISA) was used to analyze microglial M1/M2 polarization and detect levels of inflammatory factors. Cell viability was determined by Cell Counting Kit (CCK)-8 assay. Cell apoptosis was assessed by flow cytometry, caspase-3 activity assay, and DNA fragmentation assay. Quantitative real-time polymerase chain reaction was used to detect gene expression. Luciferase reporter and RNA pull-down assays were exploited to validate the interaction between genes. BMSCs-exos promoted M2 polarization while inhibited M1 polarization in LPS-stimulated BV-2 cells. BMSCs-exos inhibited the secretion of interleukin (IL)-1β, IL-6, and TNF-α, while increased the levels of IL-10. BMSCs-exos resisted the cytotoxicity and apoptosis induced by LPS in HT22 cells. BMSCs-exosomal long noncoding RNA (lncRNA) H19 enhanced the anti-inflammatory ability of BMSCs-exos in BV-2 microglia following LPS stimulation, and strengthened the neuroprotective effect of BMSCs-exos on HT22 cells in the presence of LPS. Moreover, H19 functioned as a sponge for miR-29b-3p. miR-29b-3p mimics abolished the effects of BMSCs-exosomal H19 on M1/M2 polarization and inflammation in LPS-stimulated BV-2 cells. The neuroprotective function of BMSCs-exosomal H19 was attenuated by miR-29b-3p mimics in LPS-stimulated HT22 cells. BMSCs-exosomal H19 modulates LPS-stimulated microglial M1/M2 polarization and alleviates inflammation-mediated neurotoxicity by sponging miR-29b-3p.