Background: High concentrations of interferon beta (IFN-β) inhibit malignant cell growth in vitro. However, the therapeutic utility of IFN-β in vivo is limited by its excessive toxicity when administered systemically at high doses. Mesenchymal stem cells (MSC) can be used to target delivery of agents to tumor cells. We tested whether MSC can deliver IFN-β to tumors, reducing toxicity. Methods: Human MSC were transduced with an adenoviral expression vector carrying the human IFN-β gene (MSC-IFN-β cells). Flow cytometry was used to measure tumor cell proliferation among in vitro co-cultures of MSC-IFN-β cells and human MDA 231 breast carcinoma cells or A375SM melanoma cells. We used a severe combined immunodeficiency mouse xenograft model (4–10 mice per group) to examine the effects of injected MSC-IFN-β cells and human recombinant IFN-β on the growth of MDA 231- and A375SM-derived pulmonary metastases in vivo and on survival. All statistical tests were two-sided. Results: Co-culture of MSC-IFN-β cells with A375SM cells or MDA 231 cells inhibited tumor cell growth as compared with growth of the tumor cells cultured alone (differences in mean percentage of control cell growth: −94.0% [95% confidence interval {CI} = −81.2% to −106.8%; P <.001] and −104.8% [95% CI = −82.1% to −127.5%; P <.001], respectively). Intravenous injection of MSC-IFN-β cells into mice with established MDA 231 or A375SM pulmonary metastases led to incorporation of MSC in the tumor architecture and, compared with untreated control mice, to prolonged mouse survival (median survival for MDA 231–injected mice: 60 and 37 days for MSC-injected and control mice, respectively [difference = 23.0 days (95% CI = 14.5 to 34.0 days; P <.001]; median survival for A375SM-injected mice: 73.5 and 30.0 days for MSC-injected and control mice, respectively [difference = 43.5 days (95% CI = 37.0 to 57.5 days; P <.001]). By contrast, intravenous injection of recombinant IFN-β did not prolong survival in the same models (median survival for MDA 231–injected mice: 41.0 and 37.0 days for IFN-β–injected and control mice, respectively [difference = 4 days, 95% CI = −5 to 10 days; P = .308]; median survival for A375SM-injected mice: 32.0 and 30.0 days for IFN-β–injected and control mice, respectively [difference = 2 days, 95% CI = 0 to 4.5 days; P = .059]). Conclusions: Injected MSC-IFN-β cells suppressed the growth of pulmonary metastases, presumably through the local production of IFN-β in the tumor microenvironment. MSC may be an effective platform for the targeted delivery of therapeutic proteins to cancer sites.