Several reports suggest that malignant cells generate phenotypic diversity through fusion with various types of stromal cells within the tumor microenvironment. Mesenchymal stem cell (MSC) is one of the critical components in the tumor microenvironment and a promising fusogenic candidate, but the underlying functions of MSC fusion with malignant cell have not been fully examined. Here, we demonstrate that MSCs fuse spontaneously with lung cancer cells, and the latter is reprogrammed to slow growth and stem-like state. Transcriptome profiles reveal that lung cancer cells are reprogrammed to a more benign state upon MSC fusion. We further identified FOXF1 as a reprogramming mediator that contributes not only to the reprogramming toward stemness but also to the p21-regulated growth suppression in fusion progeny. Collectively, MSC fusion does not enhance the intrinsic malignancy of lung cancer cells. The anti-malignant effects of MSC fusion-induced reprogramming on lung cancer cells were accomplished by complementation of tumorigenic defects, including restoration of p21 function and normal terminal differentiation pathways as well as up-regulation of FOXF1, a putative tumor suppressor. Such fusion process raises the therapeutic potential that MSC fusion can be utilized to reverse cellular phenotypes in cancer.