Insulin-like growth factor binding protein 7 (IGFBP7) is downregulated in several solid cancers. IGFBP7 has been proposed to act as a tumor suppressor gene through mechanisms involving senescence and apoptotic pathways. The tumor suppressor effect of IGFBP7 in glioblastoma multiforme (GBM) was examined in this study using two human GBM cell lines, U87MG and T98G. Exogenously applied IGFBP7 (20 and 100 nM) significantly reduced U87MG (~70 and ~75%, respectively) and T98G (~37 and ~50%, respectively) cell growth in soft agar. IGFBP7 stimulated senescence-associated β-galactosidase in both U87MG and T98G cells without stimulating apoptosis (annexin V and propidium iodide staining, expression of SMARCB1 or BNIP3L and caspase cleavage) or affecting phosphorylation of p44/42 MAPK. The inhibitory effect of IGFBP7 on U87MG cell growth was further assessed in vivo using U87MG cells grafted on the chick chorioallantoic membrane. In this model, U87MG cells formed solid and highly vascularized tumors that were reduced in size (~40%) when treated with 500 nM IGFBP7 compared with control tumors. Vessels in IGFBP7-treated tumors were clustered, unevenly distributed and associated with higher number of α-SMA positive cells compared with those in untreated tumors. IGFBP7 induced both aortic smooth muscle cell (AoSMC) chemoattraction and endothelial cell (EC) transdifferentiation into a SM-like cell phenotype. U87MG conditioned media-induced IGFBP7 expression in ECs was significantly inhibited by the cross-talk/interaction with SMCs. This study indicates that IGFBP7 suppresses U87MG tumor cell growth, induces cell senescence and participates in tumor vessel stabilization by promoting SMC/pericyte recruitment and differentiation.