Gene delivery into MSCs (mesenchymal stem cells) has great promise for gene therapy, and lentiviral transduction has recently been shown to be a highly efficient method for gene delivery. Our previous studies indicated that the umbilical cord is a new source of MSCs; however, it was unclear whether the UC-MSCs (umbilical-cord-derived MSCs) would retain their characteristics after LV (lentivirus)-mediated gene transduction. The aim of the present study is to investigate the feasibility of transducing UC-MSCs with lentiviral vectors and to determine whether these transduced stem cells would retain their ability to differentiate into different lineages. Herein, we demonstrate that the percentage of EGFP (enhanced green fluorescent protein)-positive cells increased with the MOI (multiplicity of infection) and the number of transduction cycles. In addition, we observed that the transduced MSCs were capable of differentiating into adipogenic and osteogenic lineages expressing lineage-specific genes while maintaining high EGFP expression levels. In their undifferentiated state, the UC-MSCs continued to express both the transgene [EGFP or TNF (tumour necrosis factor)-Tumstatin] and stem cell markers such as Oct-4, Nanog, BMI-1 and nucleostemin. The presence of exogenous antitumour molecule-coding gene integration was verified by PCR and RT-PCR (reverse transcription-PCR) and also by immunohistochemistry. It was also shown that TNF-Tumstatin that can be secreted by MSCs has a cytotoxic effect on prostate cancer cells in vitro. These findings suggest that lentiviral transduction may be used to deliver therapeutic genes to human UC-MSCs and this may have a wide range of applications in gene therapy.