Genetically modified adipose tissue derived mesenchymal stromal cells (hAMSCs) with tumor homing capacity have been proposed for localized therapy of chemo- and radiotherapy resistant glioblastomas. We demonstrate an effective procedure to optimize glioblastoma therapy based on the use of genetically modified hAMSCs and in vivo non invasive monitoring of tumor and therapeutic cells. Glioblastoma U87 cells expressing Photinus pyralis luciferase (Pluc) were implanted in combination with hAMSCs expressing a trifunctional Renilla reniformis luciferase-red fluorescent protein-thymidine kinase reporter in the brains of SCID mice that were subsequently treated with ganciclovir (GCV). The resulting optimized therapy was effective and monitoring of tumor cells by bioluminescence imaging (BLI) showed that after 49 days GCV treatment reduced significantly the hAMSC treated tumors; by a factor of 10(4) relative to controls. Using a Pluc reporter regulated by an endothelial specific promoter and in vivo BLI to image hAMSC differentiation we gained insight on the therapeutic mechanism. Implanted hAMSCs homed to tumor vessels, where they differentiated to endothelial cells. We propose that the tumor killing efficiency of genetically modified hAMSCs results from their association with the tumor vascular system and should be useful vehicles to deliver localized therapy to glioblastoma surgical borders following tumor resection.