Osteonecrosis of the femoral head (ONFH) is a destructive bone disease, and overuse of alcohol is one of the major contributing factors. Although mesenchymal stem cells (MSCs) and their exosomes have been reported to attenuate ONFH, the potential mechanisms of alcohol-induced ONFH (AONFH) are unclear. Here, we isolated and identified human umbilical cord MSCs-derived exosomal (hucMSCs-exos) miR-25-3p. We observed that hucMSCs-exos transferred miR-25-3p into bone marrow stem cells (BMSCs). HucMSCs-exos miR-25-3p increased cell viability, osteogenic differentiation, and inhibited apoptosis of alcohol-treated BMSCs and AONFH rat model. Mechanically, hucMSCs-exos upregulated miR-25-3p expression in BMSCs by repressing miR-25-3p DNA methylation, and DNA methylation inhibitor 5-Aza-2-deoxycytidine (DAC) ameliorated AONFH. Besides, miR-25-3p suppressed gremlin 1 (GREM1) expression, and upregulation of GREM1 restored the inhibition of hucMSCs-exos on AONFH. Therefore, we determined that hucMSCs-exos miR-25-3p alleviated AONFH by inhibiting miR-25-3p DNA methylation and GREM1 expression, which may help identify novel biomarkers, diagnostic and therapeutic targets.