The poor outcome of cancer gene therapy in clinical trials relates in part to insufficient gene delivery to tumor sites. Mesenchymal stem cells (MSCs) represent a new tool for the delivery of therapeutic agents to tumor cells. This study used an orthotopic nude mice model of hepatocellular carcinoma (HCC) to evaluate the potential of genetically modified human MSCs (hMSCs), to function as an effective delivery vehicle for therapeutic genes. hMSCs derived from the bone marrow were efficiently engineered to express human pigment epithelium-derived factor (PEDF) by lentiviral transduction, then tested in vitro for high-level expression and bioactivity of the transgenic protein. The preferential homing of hMSCs toward HCC was confirmed by in vitro and in vivo migration assays. in vivo efficacy experiments showed that intravenous (i.v.) injection of PEDF-expressing hMSCs significantly suppressed both the growth of primary liver tumors and the development of pulmonary metastases. Moreover, hMSCs-based PEDF gene delivery moderately increased the systemic levels of human PEDF. Immunohistochemistry of primary liver tumors demonstrated lower microvessel density in mice treated with hMSCs-PEDF than in control mice. This is the first study to show the potential of hMSCs as an effective delivery vehicle for therapeutic genes in the treatment of HCC.