Diabetic retinopathy (DR) is a highly hazardous and widespread complication of diabetes mellitus (DM). The accumulated reactive oxygen species (ROS) play a central role in DR development. The aim of this research was to examine the impact and mechanisms of mesenchymal stem cell (MSC)-derived small extracellular vesicles (sEV) on regulating ROS and retinal damage in DR. Intravitreal injection of sEV inhibited Cullin3 neddylation, stabilized Nrf2, decreased ROS, reduced retinal inflammation, suppressed Müller gliosis, and mitigated DR. Based on MSC-sEV miRNA sequencing, bioinformatics software, and dual-luciferase reporter assay, miR-143-3p was identified to be the key effector for MSC-sEV's role in regulating neural precursor cell expressed developmentally down-regulated 8 (NEDD8)-mediated neddylation. sEV were able to be internalized by Müller cells. Compared to advanced glycation end-products (AGEs)-induced Müller cells, sEV coculture decreased Cullin3 neddylation, activated Nrf2 signal pathway to combat ROS-induced inflammation. The barrier function of endothelial cells was impaired when endothelial cells were treated with the supernatant of AGEs-induced Müller cells, but was restored when treated with supernatant of AGEs-induced Müller cells cocultured with sEV. The protective effect of sEV was, however, compromised when miR-143-3p was inhibited in sEV. Moreover, the protective efficacy of sEV was diminished when NEDD8 was overexpressed in Müller cells. These findings showed MSC-sEV delivered miR-143-3p to inhibit Cullin3 neddylation, stabilizing Nrf2 to counteract ROS-induced inflammation and reducing vascular leakage. Our findings suggest that MSC-sEV may be a potential nanotherapeutic agent for DR, and that Cullin3 neddylation could be a new target for DR therapy.