Tumor necrosis factor-α (TNF-α) is an inflammatory cytokine involved in cell survival, apoptosis, and homeostasis. However, the regulatory effect of TNF-α on mesenchymal stem cell (MSC) redox regulation remains unknown. The process of delaying the senescence of MSCs and maintaining antioxidation mechanism is important in transplantation therapy to treat inflammatory diseases that result from restricted immunomodulatory effects of senescent MSCs. Thus, we examined the role of TNF-α-mediated signaling and its regulatory mechanisms on the senescence of umbilical cord blood-derived MSCs (UCB-MSCs) and identified its therapeutic efficacy in a collagen-induced arthritis (CIA) mouse model. We found that TNF-α increased fatty acid synthesis and lipid droplet (LD) formation through NF-κB/SREBP1-mediated FASN, SCD1, and DGAT2 expression, which protects UCB-MSCs from oxidative stress against accumulated toxic lipids. Additionally, DGAT2-mediated LD formation was regulated by TNF-α-activated TNF receptor (TNFR)1 signaling. We also found that storage of unsaturated FAs in LDs is regulated by SIRT5-dependent β-oxidation of FAs, which reduces mitochondrial ROS (mtROS) accumulation. Particularly, mtROS homeostasis was maintained by superoxide dismutase 2 (SOD2) upregulation through TNFR2-mediated SIRT5/Nrf2 signaling. In a CIA mouse model, UCB-MSCs transfected with SIRT5 siRNA exhibited reduced therapeutic effects compared with UCB-MSCs transfected with NT siRNA. Overall, the results indicated that SIRT5 plays a central role in protecting TNF-α-induced UCB-MSC senescence through FA β-oxidation and SOD2-mediated antioxidation.