Insufficient targeting of the therapeutic genes to tumor cells is one of the major reasons for failure in cancer gene therapy. Mesenchymal stem cells (MSCs) seem to be a good candidate as a carrier for gene therapy because of its selective tumor tissue-homing properties. In the current study, we constructed baculoviral vectors (BVs) carrying cytosine deaminase (CD) (BV-CD) or green fluorescence protein (GFP) genes (BV-GFP) and tested the transduction efficiency of the vectors in tumor and mesenchymal stem cells. We also tested the in vivo efficacy of the BV-CD vector in a colon cancer model. Our results showed that the recombinant baculoviral vectors can efficiently transduce mammalian cells and express genes of interest. The BV-CD vector treatment caused significant in vitro cytotoxicity when used with 5-fluorocytosine. MSCs loaded with the BV-CD vector caused a significant delay in tumor growth and increased survival when compared to control and MSC alone treated groups bearing colon cancer.