Antiangiogenesis has been exploited as an effective approach to inhibit the growth of solid tumors. This technique has been evaluated using various vectors in several xenograft animal models to demonstrate the efficacy of endostatin gene therapy against cancer growth. However, previous studies have not examined the use of cord blood CD34+ cells as endostatin-producing cells for gene therapy against hepatoma. This exploratory study was done to investigate the local effects of CD34+ cells transduced with the endostatin gene on a mouse xenograft tumor model. The human endostatin gene was transferred into CD34+ cells using the recombinant retrovirus plasmid, pLncx/endo. Expression was verified by RT-PCR and Western blot analyses, confirming the stable expression and secretion of endostatin from the transferred CD34+ cells. The proliferation of vascular endothelial cells was evaluated by MTT assay and found to decrease by about 59.9% when treated with the supernatant of cultured transfected CD34+ cells in vitro. These genetically modified cord blood CD34+ cells were implanted intratumorally and tumor regression was evaluated after 2 weeks. The average size of a xenograft tumor in the CD34+/endo group was reduced 31.39% compared to that in the untreated mice or those transplanted with CD34+ cells transduced with a control vector. The microvascular density of the tumor decreased 62.45% in the treated group. The expression of proliferation cell nuclear antigen (PCNA) also decreased significantly in the treated group. Moreover, the apoptotic index (AI) of tumors, as evaluated by TUNEL staining, was significantly enhanced in the treatment group. Our findings indicate that angiogenesis of the xenograft tumor in mice may be inhibited by local administration of genetically modified CD34+ cells expressing the endostatin gene. This novel approach may lead to a new direction of cell-based gene therapy for malignancy.