Glioblastoma is among the most aggressive and treatment resistant of all human cancers. Conventional therapeutic approaches are unsuccessful because of diffuse infiltrative invasion of glioma tumor cells into normal brain parenchyma. Stem cell-based therapies provide a promising approach for the treatment of malignant gliomas because of their migratory ability to invasive tumor cells. Our therapeutic strategy was to use human bone marrow-derived mesenchymal stromal cells (hMSCs) as a cellular vehicle for the targeted delivery and local production of the biologic agent tumor necrosis factor-related apoptosis-inducing ligand (TRAIL) at the glioma tumor site. hMSCs were transduced with a lentivirus expressing secretable TRAIL (S-TRAIL) and mCherry (red fluorescent protein). Our results clearly demonstrate the retention of tumor tropic ability of hMSC S-TRAIL cells by in vitro and in vivo migration assays. In vitro assays confirmed the expression, release, and biological activity of S-TRAIL produced by hMSC S-TRAIL cells. For the in vivo assessment of therapeutic efficacy, hMSCs were injected ipsilateral to an established intracranial glioma tumor in a mouse xenograft model. Genetically engineered hMSC S-TRAIL cells were effective in inhibiting intracranial U87 glioma tumor growth (81.6%) in vivo and resulted in significantly longer animal survival. Immunohistochemical studies demonstrated significant, eight fold greater tumor cell apoptosis in the hMSC S-TRAIL-treated group than in controls. Our study demonstrates the therapeutic efficacy of hMSC S-TRAIL cells and confirms that hMSCs can serve as a powerful cell-based delivery vehicle for the site-specific release of therapeutic proteins.