Stem cells have received a great deal of attention for their clinical and therapeutic potential for treating human diseases and disorders. Recent studies have shown that it is possible to genetically engineered stem cells (GESTECs) to produce suicide enzymes that convert non-toxic prodrugs to toxic metabolites, selectively migrate toward tumor sites and reduce tumor growth. In this study, we evaluated whether these GESTECs are capable of migrating to hepatocarcinoma cells and examined the potential therapeutic efficacy of gene-directed enzyme prodrug therapy against liver cancer cells in cellular and animal models. A modified transwell migration assay was performed to determine the migratory capacity of GESTECs to Hep3B hepatocarcinoma cells. GESTECs, that is, HB1.F3.CD or HB1.F3.CD.interferon-β (IFN-β) cells, engineered to express a suicide gene, cytosine deaminase (CD), selectively migrated toward liver cancer cells. Treatment of Hep3B, human liver cancer cells, with the prodrug 5-fluorocytosine (5-FC) in the presence of HB1.F3.CD or HB1.F3.CD.IFN-β cells resulted in the inhibition of Hep3B cell growth. In a xenografted mouse model injected with hepatocarcinoma, we investigated the therapeutic effect of these stem cells. For 9 weeks, the xenografted mice were treated with HB1.F3.CD or HB1.F3.CD.IFN-β in the presence of 5-FC. A growth of tumor mass was inhibited about 40-50% in the mice treated with GESTECs and a prodrug. In addition, we further confirmed the cytotoxic effect on tumor cells by histological analysis and migratory effect of therapeutic stem cells. Taken together, GESTECs expressing a fusion gene encoding CD and IFN-β may exert a synergistic antitumor effect on this type of tumor.