Suicide genes have recently emerged as an attractive alternative therapy for the treatment of various types of intractable cancers. The efficacy of suicide gene therapy relies on efficient gene delivery to target tissues and the localized concentration of final gene products. Here, we showed a potential ex vivo therapy that used mesenchymal stem cells (MSCs) as cellular vehicles to deliver a bacterial suicide gene, cytosine deaminase (CD) to brain tumors. MSCs were engineered to produce CD enzymes at various levels using different promoters. When co-cultured, CD-expressing MSCs had a bystander, anti-cancer effect on neighboring C6 glioma cells in proportion to the levels of CD enzymes that could convert a nontoxic prodrug, 5-fluorocytosine (5-FC) into cytotoxic 5-fluorouracil (5-FU) in vitro. Consistent with the in vitro results, for early stage brain tumors induced by intracranial inoculation of C6 cells, transplantation of CD-expressing MSCs reduced tumor mass in proportion to 5-FC dosages. However, for later stage, established tumors, a single treatment was insufficient, but only multiple transplantations were able to successfully repress tumor growth. Our findings indicate that the level of total CD enzyme activity is a critical parameter that is likely to affect the clinical efficacy for CD gene therapy. Our results also highlight the potential advantages of autograftable MSCs compared with other types of allogeneic stem cells for the treatment of recurrent glioblastomas through repetitive treatments.