Mesenchymal stem cells (MSCs) are a subset of nonhematopoietic multipotent cells found primarily within the bone marrow stroma. The ability of MSCs to specifically home to sites of tumors and their metastases, while escaping host immune surveillance, holds tremendous promise for tumor-targeted delivery of therapeutic agents. Concerns that MSCs may have an inherent capacity for transformation have led to a number of studies investigating their stability in vitro, as significant ex vivo expansion will be necessary to yield the number of cells required for therapeutic applications. MSCs have also been seen to influence the morphology and proliferation of cells within their vicinity through a combination of cell-to-cell interactions and the secretion of chemoattractant cytokines. Understanding interactions between MSCs and tumor cells is required to support realization of their clinical potential. This review discusses MSCs and cancer in terms of (1) potential for transformation and de novo tumor formation, (2) interactions with epithelial cancer cells in tumor establishment, and (3) potential role after engraftment at the site of an established tumor. Elucidation of any potential negative effect of MSCs in the tumor setting will support development of protocols to minimize these effects while taking full advantage of the remarkable tumor-homing capacity of these cells.