In the present study, we have tested the hypothesis that fusion between an altered cell and a mesenchymal stem cell produces a hybrid cell with enhanced characteristics associated with metastatic cancer cells, and we have developed a flexible model for investigating the mechanisms of metastasis. Human HepG2 cells with low metastatic potential were induced to fuse with rat bone marrow mesenchymal stem cells, and the progeny were compared with the parental cells for possession of enhanced in vitro and in vivo characteristics of malignant cells. Compared to the parental cells, the fused cells exhibited enhanced expression of E-cadherin, vimentin, Twist, Snail, matrix metalloproteinase 2 and 9 activities, aneuploidy and enhanced in vitro invasion and migration. In an in vivo xenograft assay, the fused cells generated increased numbers of metastatic liver and lung lesions. This model system is a flexible tool for investigation of the mechanisms of stem cell fusion in carcinogenesis and metastasis and for the discovery of new therapeutic targets to inhibit metastasis.