Recombinant retroviruses (RV) have been widely used as vectors for clinical gene therapy of malignant brain tumors. Because of the very limited stability of these vectors in vivo, RV producing cells (VPC) are routinely used for intratumoral RV release. The host immune system, however, recognizes the intratumorally grafted allogeneic or xenogeneic VPC, and mounts an immune response against them. Humoral and cellular immune responses eventually result in reduction of VPC numbers and in limited success of RV mediated gene therapy approaches. This study presents a non-pharmacological and spatially limited approach for protection of VPC grafted in the CNS against destruction by host immune responses. Murine fibroblast-derived VPC expressing herpes-simplex-virus type I thymidine kinase (HSV-tk) were genetically modified to co-express a human Fas ligand (CD95L) deletion mutant (DeltaFasL) resistant to enzymatic cleavage and shedding. Direct interactions between Fas (CD95) on lymphocytes and DeltaFasL on VPC upon cell-cell contact rapidly caused apoptosis in lymphocytes. In addition, cultured malignant brain tumor cells (U87, LN18, LN229) transduced with DeltaFasL-RV were rendered apoptotic by Fas/DeltaFasL interaction. DeltaFasL-expressing VPC grafted in a 9L rat brain tumor model survived in significantly higher numbers compared with control VPC, and did not cause an increase in neutrophil infiltration of tumors. Gene therapy of tumor bearing animals grafted with the modified DeltaFasL-VPC and given the prodrug Ganciclovir resulted in significantly increased survival rates compared to treatment with control VPC and Ganciclovir. In conclusion, prolonged intratumoral presence of DeltaFasL-VPC seems to be a direct consequence of the expression of the membrane-bound mutant FasL, and may result in increased total RV output and improved tumor transduction with RV.