Mesenchymal stem cells (MSCs) have immense potential for cell-based therapy of acute and chronic pathological conditions. MSC transplantation for cell-based therapy requires a substantial number of cells in the range of 0.5–2.5 × 106 cells/kg body weight of an individual. A prolific source of MSCs followed by in vitro propagation is therefore an absolute prerequisite for clinical applications. Umbilical cord tissue (UCT) is an abundantly available prolific source of MSC that are fetal in nature and have higher potential for ex-vivo expansion. However, the ex-vivo expansion of MSCs using a xenogeneic supplement such as fetal bovine serum (FBS) carries the risk of transmission of zoonotic infections and immunological reactions. We used platelet lysate (PL) as a xeno-free, allogeneic replacement for FBS and compared the biological and functional characteristics of MSC processed and expanded with PL and FBS by explant and enzymatic method. UCT-MSCs expanded using PL displayed typical immunophenotype, plasticity, immunomodulatory property and chromosomal stability. PL supplementation also showed 2-fold increase in MSC yield from explant culture with improved immunomodulatory activity as compared to enzymatically dissociated cultures. In conclusion, PL from expired platelets is a viable alternative to FBS for generating clinically relevant numbers of MSC from explant cultures over enzymatic method.