Lung cancer is a major public health problem in the western world, and gene therapy strategies to tackle this disease systemically are often impaired by inefficient delivery of the vector to the tumour tissue. Some of the main factors inhibiting systemic delivery are found in the blood stream in the form of red and white blood cells (WBCs) and serum components. Mesenchymal stem cells (MSCs) have been shown to home to tumour sites and could potentially act as a shield and vehicle for a tumouricidal gene therapy vector. Here, we describe the ability of an adenoviral vector expressing TRAIL (Ad.TR) to transduce MSCs and show the apoptosis-inducing activity of these TRAIL-carrying MSCs on A549 lung carcinoma cells. Intriguingly, using MSCs transduced with Ad.enhanced-green-fluorescent-protein (EGFP) we could show transfer of viral DNA to cocultured A549 cells resulting in transgenic protein production in these cells, which was not inhibited by exposure of MSCs to human serum containing high levels of adenovirus neutralizing antibodies. Furthermore, Ad.TR-transduced MSCs were shown not to induce T-cell proliferation, which may have resulted in cytotoxic T-cell-mediated apoptosis induction in the Ad.TR-transduced MSCs. Apoptosis was also induced in A549 cells by Ad.TR-transduced MSCs in the presence of physiological concentrations of WBC, erythrocytes and sera from human donors that inhibit or neutralize adenovirus alone. Moreover, we could show tumour growth reduction with TRAIL-loaded MSCs in an A549 xenograft mouse model. This is the first study that demonstrates the potential therapeutic utility of Ad.TR-transduced MSCs in cancer cells and the stability of this vector in the context of the blood environment.