Bone marrow-derived mesenchymal stromal cells (MSCs), beneficial for regenerative medicine applications due to their wide differentiation capabilities, also hold promise as cellular vehicles for the delivery of therapeutic plasma-soluble gene products due to their ease of handling, expansion, and genetic engineering. We hypothesized that MSCs, gene enhanced to express interleukin-12 (IL-12) and then embedded in a matrix, may act as an anticancer neo-organoid when delivered s.c. in autologous/syngeneic hosts. We performed such experiments in mice and noted that primary murine MSCs retrovirally engineered to secrete murine IL-12 can significantly interfere with growth of 4T1 breast cancer cells in vivo, with a more substantial anticancer action achieved when these cells are embedded in a matrix. Plasma of mice that received the IL-12 MSC-containing neo-organoids showed increased levels of IL-12 and IFN-gamma. Histopathologic analysis revealed less tumor cells in implants of 4T1 cells with IL-12 MSCs, and the presence of necrotic tumor islets and necrotic capillaries, suggesting antiangiogenesis. We also showed that the anticancer effect exerted by the IL-12 MSCs is immune mediated because it is absent in immunodeficient mice, is not due to systemic IL-12 delivery, and also occurs in a B16 melanoma model. This study therefore establishes the feasibility of using gene-enhanced MSCs in a cell-based neo-organoid approach for cancer treatment.