BACKGROUND: The tumor microenvironment (TME) is a major obstacle to effective cancer therapy, driving tumor progression, metastasis, and resistance to conventional treatments. Mesenchymal stem cells (MSCs) have attracted increasing interest as therapeutic vehicles due to their intrinsic tumor-homing capability; however, the therapeutic efficacy of unmodified MSCs remains limited. METHODS: This review examines recent engineering strategies for enhancing MSC therapeutic functionality in TME modulation and precision cancer therapy. Relevant literature was surveyed with focus on nanotechnology-enabled approaches. We analyze key TME features including hypoxia, immunosuppression, and physical barriers, and how various engineering strategies address these challenges. RESULTS: Engineered MSCs have been successfully transformed into therapeutic "bio-factories" through genetic modification, enabling sustained secretion of cytokines, enzymes, or therapeutic proteins. In parallel, payload-based strategies have established MSCs as effective "Trojan horse" carriers for nanomaterials, chemotherapeutic agents, and oncolytic viruses, allowing precise delivery and active remodeling of the TME. These approaches collectively enhance tumor targeting, therapeutic efficacy, and spatial control within solid tumors. CONCLUSION: The integration of MSC biology with nanotechnology provides a powerful platform for regulating the TME and achieving precision oncology. While challenges related to safety, protumorigenic effects, and manufacturing scalability remain, recent advances are rapidly addressing these barriers. Engineered MSC-based therapies hold great promise to revolutionize cancer treatment and overcome the longstanding challenges of solid tumor therapy.