Neuroblastoma, the most common extracranial solid tumor in childhood, remains a therapeutic challenge. However, one promising patient treatment strategy is the delivery of anti-tumor therapeutic agents via mesenchymal stromal cell (MSC) therapy. MSCs have been safely used to treat genetic bone diseases such as osteogenesis imperfecta, cardiovascular diseases, autoimmune diseases, and cancer. The pro-inflammatory cytokine interferon-gamma (IFNγ) has been shown to decrease tumor proliferation by altering the tumor microenvironment (TME). Despite this, clinical trials of systemic IFNγ therapy have failed due to the high blood concentration required and associated systemic toxicities. Here, we developed an intra-adrenal model of neuroblastoma, characterized by liver and lung metastases. We then engineered MSCs to deliver IFNγ directly to the TME. In vitro, these MSCs polarized murine macrophages to the M1 phenotype. In vivo, we attained a therapeutically active TME concentration of IFNγ without increased systemic concentration or toxicity. The TME-specific IFNγ reduced tumor growth rate and increased survival in two models of T cell deficient athymic nude mice. Absence of this benefit in NOD SCID gamma (NSG) immunodeficient mouse model indicates a mechanism dependent on the innate immune system. IL-17 and IL-23p19, both uniquely M1 polarization markers, transiently increased in the tumor interstitial fluid. Finally, the MSC vehicle did not promote tumor growth. These findings reveal that MSCs can deliver effective cytokine therapy directly to the tumor while avoiding systemic toxicity. This method transiently induces inflammatory M1 macrophage polarization, which reduces tumor burden in our novel neuroblastoma murine model. Stem Cells 2018;36:915-924.