Mesenchymal stem cells (MSC) have received much attention in the field of hematopoietic stem cell transplantation because not only do they support hematopoiesis but also exhibit a profound immunosuppressive activity that can be exploited to prevent undesired alloreactivity. We have previously shown that their immunosuppressive activity is mainly exerted at the level of T-cell proliferation. Here, we show that MSC exhibit a similar antiproliferative activity on tumor cells of hematopoietic and non hematopoietic origin. In vitro, MSC produced the transient arrest of tumor cells in the G(1) phase of cell cycle; this was accompanied by a reduction in the apoptotic rate even when survival factors were limiting. However, when tumor cells were injected into non-obese diabetic-severe combined immunodeficient mice in conjunction with MSC, their growth was much faster as compared to the group receiving only tumor cells. To explain the discrepancy between the in vitro and in vivo behavior, we suggest that MSC have the ability to form a cancer stem cell niche in which tumor cells can preserve the potential to proliferate and sustain the malignant process. We conclude that the clinical use of MSC in conditions in which a malignant disease is involved should be handled with extreme caution.