Bone marrow mesenchymal stromal cells (BM-MSCs) may survive and proliferate in the presence of cycling neoplastic cells. Exogenously administered MSCs are actively incorporated in the tumor as stromal fibroblasts, thus competing with the local mesenchymal cell precursors. For this reason, MSCs have been suggested as a suitable carrier for gene therapy strategies, as they can be genetically engineered with genes encoding for biologically active molecules that can inhibit tumor cell proliferation and enhance the antitumor immune response. We used BM-MSCs engineered with the murine interferon-alpha (IFN-α) gene (BM-MSCs/IFN-α) to assess in a mouse plasmacytoma model the efficacy of this approach toward neoplastic plasma cells. We found that IFN-α can be efficiently produced and delivered inside the tumor microenvironment. Subcutaneous multiple administration of BM-MSCs/IFN-α significantly hampered the tumor growth in vivo and prolonged the overall survival of mice. The antitumor effect was associated with enhanced apoptosis of tumor cells, reduction in microvessel density, and ischemic necrosis. By contrast, intravenous administration of BM-MSCs/IFN-α did not significantly modify the survival of mice, mainly as a consequence of an excessive entrapment of injected cells in the pulmonary vessels. In conclusion, BM-MSCs/IFN-α are effective in inhibiting neoplastic plasma cell growth; however, systemic administration of engineered MSCs needs to be improved to make this approach potentially suitable for the treatment of multiple myeloma.