Glioblastoma is highly aggressive and prognosis for glioma patients remains poor due to its highly infiltrative character and resistance to current methods of treatment. Neural stem cells (NSCs) are promising therapeutic delivery vehicles for glioma treatment. They exhibit strong tropism towards tumors and can infiltrate into satellite tumor sites, thus targeting both the original tumor mass and disseminated cancer cells. In this study, our findings indicate successful generation of iPS cells by introduction of a single lentiviral cassette into primary mouse embryonic fibroblasts and the neural differentiation of these iPS cells. Baculoviral vectors are emerging as a novel class of vectors for gene delivery in recent years. This insect DNA virus has the ability to enter mammalian cells without replicating or causing toxicity to the transduced cell unlike adenoviruses and retroviruses. In this cancer suicide gene therapy system, Baculoviral vectors carrying the HSV-TK gene was successfully expressed in the iPS cell-derived NSCs. These iPS-derived NSCs are subsequently used in in vitro and in vivo analysis. We demonstrate that the iPS-derived NSCs display migratory behaviour towards glioma cells in vitro. The NSCs expressing HSV-TK elicit a bystander killing effect on glioma cells in the presence of prodrug GCV and significantly extended the lifespan of our glioma mouse model in vivo. This is a proof of principle study demonstrating a possible therapeutic benefit of mouse iPS cell-derived NSCs in a glioma cancer mouse model. From this mouse model, perhaps similar therapeutic benefits can be observed from human iPS cells and iPS cell-derived NSCs for improved HSV-TK gene therapy of malignant gliomas, circumventing the logistic difficulties of obtaining and culturing primary NSCs and the possible immunological incompatibility of ES-derived NSCs.