Mesenchymal stem cells (MSCs) are a versatile group of nonhematopoietic stem cells with high potency of proliferation and pluripotency of differentiation. Endogenous MSCs circulate in the blood until being called to sites of inflammation or tumors, where they could differentiate into bone, cartilage, fat, or muscle cells to repair or replace damaged tissue. Ectogenous MSCs also demonstrate satisfactory tropism toward primary tumor sites and metastatic foci with low immunogenicity and thus can be exploited as a cell-mediated gene therapy to counteract tumor growth and development. However, tumor-promoting, and even carcinogenetic, effects of MSCs are also observed both in vitro and in vivo, raising potential risks in clinical applications. Recent advances of MSCs in tumor-targeted biotherapy were summarized. New findings of the interaction between MSCs and tumor cells in the tumor microenvironment were expounded.