Intra-articular stem cell therapy may help alleviate lameness caused by osteoarthritis in dogs. Umbilical cord-derived stem cell (UMSC) therapy has not yet been investigated in a veterinary clinical study. We hypothesized that dogs treated with intra-articular UMSC will have improved limb function and quality of life when compared to dogs treated with a saline placebo injection. This was a prospective, double-blinded, placebo-controlled clinical trial in client-owned dogs with chronic elbow osteoarthritis with a follow-up time of 6 months. Dogs were assigned to receive intra-articular UMSC ( = 38) or a saline placebo intra-articular injection ( = 30). Outcome measures included the Canine Brief Pain Inventory score (CBPI) and peak vertical force (PVF) from force-platform gait analysis. Treatment was considered successful when there was a decrease in the Pain Severity Score of at least one and a decrease in the Pain Interference Score of at least one from baseline. Success rates and PVF were compared between groups. No adverse effects associated with UMSC were noted. Of the dogs completing the study, treatment success in the UMSC ( = 28) vs. placebo groups ( = 23) was observed in 54 vs. 28% of dogs at 1 month, 50 vs. 27% at 3 months, and 46 vs. 14% at 6 months, respectively. Success rate in the UMSC group was significantly higher than the placebo group at 1 and 6 months after treatment. However, no differences in PVF of the affected limb over time was observed in either group. Intra-articular UMSC for osteoarthritis may improve clinical signs based on owner observations.