Emerging evidence suggests that both human stem cells and mature stromal cells can play an important role in the development and growth of human malignancies. In contrast to these tumor-promoting properties, we observed that in an in vivo model of Kaposi's sarcoma (KS), intravenously (i.v.) injected human mesenchymal stem cells (MSCs) home to sites of tumorigenesis and potently inhibit tumor growth. We further show that human MSCs can inhibit the in vitro activation of the Akt protein kinase within some but not all tumor and primary cell lines. The inhibition of Akt activity requires the MSCs to make direct cell-cell contact and can be inhibited by a neutralizing antibody against E-cadherin. We further demonstrate that in vivo, Akt activation within KS cells is potently down-regulated in areas adjacent to MSC infiltration. Finally, the in vivo tumor-suppressive effects of MSCs correlates with their ability to inhibit target cell Akt activity, and KS tumors engineered to express a constitutively activated Akt construct are no longer sensitive to i.v. MSC administration. These results suggest that in contrast to other stem cells or normal stromal cells, MSCs possess intrinsic antineoplastic properties and that this stem cell population might be of particular utility for treating those human malignancies characterized by dysregulated Akt.