Stem cells from human exfoliated deciduous teeth (SHED) provide an important autologous source for stem cell-based regenerative therapies with their easy acquisition and multipotency. However, the understanding of their antibacterial and immunomodulatory properties is limited. This in vitro research aims to determine whether SHED inhibits the growth of Streptococcus mutans (S. mutans) and Enterococcus faecalis (E. faecalis), as well as whether or not it has immunomodulatory effects by measuring interleukins (ILs)-2 and -6 levels. SHEDs were derived from the pulp of deciduous teeth that had undergone up to two-thirds of their roots’ resorption. Isolated SHEDs were characterized on their morphological features, viability, assessment of surface markers, and in vitro induction into osteocytes and adipocytes. SHED was tested for its antibacterial efficacy against S. mutans and E. faecalis using a colony-forming units (CFU) assay. Lastly, we checked the cytokine levels by enzyme-linked immune sorbent assay (ELISA) for assessing the immunomodulatory properties of SHED. The results showed that the established SHED had fibroblastic morphology with higher viability. The ability to differentiate into osteocytes and adipocytes, as well as the expression of stem cell-specific markers, demonstrated their potential and flexibility under in vitro settings. SHED demonstrated antibacterial characteristics by significantly (p < 0.05) lowering S. mutans CFU, whereas E. faecalis CFU was either unaffected by or just slightly affected by the cells. SHED also helped keep inflammatory indicators, including IL-2 and IL-6, at stable levels when compared to the control. The results indicate that SHED may aid in preventing or reducing an infection due to its antibacterial activity and may provide immunomodulatory activities by controlling the production of cytokines.