Human bone marrow mesenchymal stromal cells (hBMSC) have been shown to participate in malignant transformation. However, hampered by the low frequency of malignant transformation of hBMSC, we do not yet know how to prevent malignant transformation of implanted hBMSC. In this study, in order to establish a model for the eradication of hBMSC-derived malignant cells, a gene fusion consisting of a human telomerase (hTERT) promoter modified with both c-Myc and myeloid zinc finger protein2 (MZF-2) binding elements and followed by the E. coli cytosine deaminase (CD) and luciferase genes was stably transferred into hBMSC via lentiviral transduction; n-phosphonacelyl-L-aspartic acid (PALA) selection was used to generate malignant cell colonies derived from transduced hBMSC after treatment with the carcinogenic reagent BPDE. Cells that were amplified after PALA selection were used for transplantation and 5-FC pro-drug cytotoxicity tests. The results showed that PALA-resistant malignant cells could be generated from hBMSC co-induced with lentiviral transduction and treatment with Benzo(a)pyrene Diol Epoxide (BPDE); the modification of c-Myc and MZF-2 binding elements could remarkably enhance the transcriptional activities of the hTERT promoter in malignant cells, whereas transcriptional activity was depressed in normal hBMSC; malignant cells stably expressing CD under the control of the modified hTERT promoter could be eliminated by 5-FC administration. This study has provided a method for targeted eradication of malignant cells derived from hBMSC.