Diabetes is a chronic disease characterized by high levels of blood glucose. Diabetic patients should normalize these levels in order to avoid short and long term clinical complications. Presently, blood glucose monitoring is dependent on frequent finger pricking and enzyme based systems that analyze the drawn blood. Continuous blood glucose monitors are already on market but suffer from technical problems, inaccuracy and short operation time. A novel approach for continuous glucose monitoring is the development of implantable cell-based biosensors that emit light signals corresponding to glucose concentrations. Such devices use genetically modified cells expressing chimeric genes with glucose binding properties. MSCs are good candidates as carrier cells, as they can be genetically engineered and expanded into large numbers. They also possess immunomodulatory properties that, by reducing local inflammation, may assist long operation time. Here, we generated a novel immortalized human MSC line co-expressing hTERT and a secreted glucose biosensor transgene using the Sleeping Beauty transposon technology. Genetically modified hMSCs retained their mesenchymal characteristics. Stable transgene expression was validated biochemically. Increased activity of hTERT was accompanied by elevated and constant level of stem cell pluripotency markers and subsequently, by MSC immortalization. Furthermore, these cells efficiently suppressed PBMC proliferation in MLR transwell assays, indicating that they possess immunomodulatory properties. Finally, biosensor protein produced by MSCs was used to quantify glucose in cell-free assays. Our results indicate that our immortalized MSCs are suitable for measuring glucose concentrations in a physiological range. Thus, they are appropriate for incorporation into a cell-based, immune-privileged, glucose-monitoring medical device.