Stem cells from mesenchymal origin (MSC) exert a plethora of immunomodulatory effects. We created a neoplastic model based on in vitro step-wise transformation to assess whether oncogenic pathways have the capacity to mould the cross-talk of MSC and lymphocytes. Neoplastic MSC exhibit an increased inhibitory effect on T cell proliferation, either directly or mediated by myeloid derived suppressor cells. Additionally, transformation of MSC enhances T cell apoptosis without reducing either the percentage of CD25 expressing cells or the level of this protein expression. Malignant transformation drives MSC to lose dependency on nitric oxide for immunosuppression whilst increasing the constitutive production of PGE2. Our results indicate that oncogenesis tunes the interplay between MSC and immune cells, favoring cancer immune evasion. © 2014 Elsevier Inc.