Colorectal carcinoma (CRC) constitutes a common malignancy with limited therapeutic options in metastasized stages. Mesenchymal stem cells (MSC) home to tumours and may therefore serve as a novel therapeutic tool for intratumoral delivery of antineoplastic factors. Tumour necrosis factor (TNF)-related apoptosis inducing ligand (TRAIL) which promises apoptosis induction preferentially in tumour cells represents such a factor. We generated TRAIL-MSC by transduction of human MSC with a third generation lentiviral vector system and analysed their characteristics and capacity to inhibit CRC growth. (1) TRAIL-MSC showed stable transgene expression with neither changes in the defining MSC characteristics nor signs of malignant transformation. (2) Upon direct in vitro coculture TRAIL-MSC induced apoptosis in TRAIL-sensitive CRC-cell lines (DLD-1 and HCT-15) but also in CRC-cell lines resistant to soluble TRAIL (HCT-8 and SW480). (3) In mixed subcutaneous (s.c.) xenografts TRAIL-MSC inhibited CRC-tumour growth presumably by apoptosis induction but a substantial proportion of TRAIL-MSC within the total tumour cell number was needed to yield such anti-tumour effect. (4) Systemic application of TRAIL-MSC had no effect on the growth of s.c. DLD-1 xenografts which appeared to be due to a pulmonary entrapment and low rate of tumour integration of TRAIL-MSC. Systemic TRAIL-MSC caused no toxicity in this model. (5) Wild-type MSC seemed to exert a tumour growth-supporting effect in mixed s.c. DLD-1 xenografts. These novel results support the idea that lentiviral TRAIL-transgenic human MSC may serve as vehicles for clinical tumour therapy but also highlight the need for further investigations to improve tumour integration of transgenic MSC and to clarify a potential tumour-supporting effect by MSC.