The immunosuppressive tumor microenvironment represents a major hurdle to cancer therapy. We developed a gene transfer strategy into hematopoietic stem cells (HSCs) to target transgene expression to tumor-infiltrating monocytes/macrophages. Using a combination of transcriptional and microRNA-mediated control, we achieved selective expression of an interferon-α (IFN-α) transgene in differentiated monocytes of human hematochimeric mice. We show that IFN-α transgene expression does not impair engraftment and long-term multilineage repopulation of NSG (NOD/LtSz-scidIL2Rγ(null)) mice by transplanted human HSCs. By providing a source of human cytokines in the mice, we improved the functional reconstitution of human myeloid, natural killer, and T cell lineages, and achieved enhanced immune-mediated clearance of transplanted human breast tumors when hematopoiesis was engineered for tumor-targeted IFN-α expression. By applying our strategy to mouse breast cancer models, we achieved inhibition of tumor progression and experimental metastases in an autologous setting, likely through enhanced generation of effector T cells and their recruitment to the neoplastic tissues. By forcing IFN-α expression in tumor-infiltrating macrophages, we blunted their innate protumoral activity and reprogrammed the tumor microenvironment toward more effective dendritic cell activation and immune effector cell cytotoxicity. Overall, our studies validate the feasibility, safety, and therapeutic potential of a new cancer gene therapy strategy, and open the way to test this approach as adjuvant therapy in advanced breast cancer patients.