Redirecting T cells to specifically kill malignant cells has been validated as an effective anti-cancer strategy in the clinic with the approval of blinatumomab for acute lymphoblastic leukemia. However, the immunosuppressive nature of the tumor microenvironment potentially poses a significant hurdle to T cell therapies. In hematological malignancies, the bone marrow (BM) niche is protective to leukemic stem cells and has minimized the efficacy of several anti-cancer drugs. In this study, we investigated the impact of the BM microenvironment on T cell redirection. Using bispecific antibodies targeting specific tumor antigens (CD123 and BCMA) and CD3, we observed that co-culture of acute myeloid leukemia or multiple myeloma cells with BM stromal cells protected tumor cells from bispecific antibody-T cell-mediated lysis in vitro and in vivo. Impaired CD3 redirection cytotoxicity was correlated with reduced T cell effector responses and cell-cell contact with stromal cells was implicated in reducing T cell activation and conferring protection of cancer cells. Finally, blocking the VLA4 adhesion pathway in combination with CD3 redirection reduced the stromal-mediated inhibition of cytotoxicity and T cell activation. Our results lend support to inhibiting VLA4 interactions along with administering CD3 redirection therapeutics as a novel combinatorial regimen for robust anti-cancer responses.