Mesenchymal stem cells (MSCs) have immunomodulatory properties and support hematopoiesis in the bone marrow (BM). To develop a new strategy to not only prevent graft-vs-host disease (GVHD) but also to enhance engraftment, a phase I trial of cord blood transplantation (CBT) combined with intra-BM injection of MSCs (MSC-CBT) was designed. Third-party BM-derived MSCs were injected intra-BM on the day of CBT. The conditioning regimen varied according to patient characteristics. GVHD prophylaxis was tacrolimus and methotrexate. The primary endpoint was toxicity related to intra-BM injection of MSCs. Clinical outcomes were compared with those of six controls who received CBT alone. Five adult patients received MSC-CBT, and no adverse events related to intra-BM injection of MSCs were observed. All patients achieved neutrophil, reticulocyte, and platelet recoveries, with median times to recoveries of 21, 35, and 38 days, respectively, comparable with controls. Grade II-IV acute GVHD developed in three controls but not in MSC-CBT patients. No patients developed chronic GVHD in both groups. At 1 year after transplantation, all MSC-CBT patients survived without relapse. This study shows the safety of MSC-CBT, and the findings also suggest that cotransplantation of MSCs may prevent GVHD with no inhibition of engraftment.