Mesenchymal stem cells (MSCs) are appealing as gene therapy cell vehicles given their ease of expansion and transduction. However, MSCs exhibit immunomodulatory and proangiogenic properties that may pose a risk in their use in anticancer therapy. For this reason, we looked for a strategy to confine MSCs to a determined location, compatible with a clinical application. Human MSCs genetically modified to express luciferase (MSC(luc)), seeded in a synthetic extracellular matrix (sECM) scaffold (sentinel scaffold) and injected subcutaneously in immunodeficient mice, persisted for more than 40 days, as assessed by bioluminescence imaging in vivo. MSCs modified to express a bispecific alpha-carcinoembryonic antigen (alphaCEA)/alphaCD3 diabody (MSC(dAb)) and seeded in an sECM scaffold (therapeutic scaffolds) supported the release of functional diabody into the bloodstream at detectable levels for at least 6 weeks after implantation. Furthermore, when therapeutic scaffolds were implanted into CEA-positive human colon cancer xenograft-bearing mice and human T lymphocytes were subsequently transferred, circulating alphaCEA/alphaCD3 diabody activated T cells and promoted tumor cell lysis. Reduction of tumor growth in MSC(dAb)-treated mice was statistically significant compared with animals that only received MSC(luc). In summary, we report here for the first time that human MSCs genetically engineered to secrete a bispecific diabody, seeded in an sECM scaffold and implanted in a location distant from the primary tumor, induce an effective antitumor response and tumor regression.