Intervertebral disc degeneration is associated with back pain and radiculopathy which, being a leading cause of disability, seriously affects the quality of life and presents a hefty burden to society. There is no effective intervention for the disease and the etiology remains unclear. Here, we show that disc degeneration exhibits features of fibrosis in humans and confirmed this in a puncture-induced disc degeneration (PDD) model in rabbit. Implantation of bone marrow-derived mesenchymal stem cells (MSCs) to PDD discs can inhibit fibrosis in the nucleus pulposus with effective preservation of mechanical properties and overall spinal function. We showed that the presence of MSCs can suppress abnormal deposition of collagen I in the nucleus pulposus, modulating profibrotic mediators MMP12 and HSP47, thus reducing collagen aggregation and maintaining proper fibrillar properties and function. As collagen fibrils can regulate progenitor cell activities, our finding provides new insight to the limited self-repair capability of the intervertebral disc and importantly the mechanism by which MSCs may potentiate tissue regeneration through regulating collagen fibrillogenesis in the context of fibrotic diseases.