Background: Our previous studies indicated that MSCCXCR4 improved cardiac function after myocardial infarction (MI). This study was aimed to investigate the specific role of MSCCXCR4 in neovascularization of infarcted myocardium using a suicide gene approach. Methods: MSCs were transduced with either lentivirus-null vector/GFP (MSCNull as control) or vector encoding for overexpressing CXCR4/GFP. The MSC derived-endothelial cell (EC) differentiation was assessed by a tube formation assay, Dil-ac-LDL uptake, EC marker expression, and VE-cadherin promoter activity assay. Gene expression was analyzed by quantitative RT-PCR or Western blot. The suicide gene approach was under the control of VE-cadherin promoter. In vivo studies: Cell patches containing MSCNull or MSCCXCR4 were transduced with suicide gene and implanted into the myocardium of MI rat. Rats received either ganciclovir (GCV) or vehicle after cell implantation. After one month, the cardiac functional changes and neovascularization were assessed by echocardiography, histological analysis, and micro-CT imaging. Results: The expression of VEGF-A and HIF-1 alpha was significantly higher in MSCCXCR4 as compared to MSCNull under hypoxia. Additionally, MSCCXCR4 enhanced new vessel formation and EC differentiation, as well as STAT3 phosphorylation under hypoxia. STAT3 participated in the transcription of VE-cadherin in MSCCXCR4 under hypoxia, which was inhibited by WP1066 (a STAT3 inhibitor). In addition, GCV specifically induced death of ECs with suicide gene activation. In vivo studies: MSCCXCR4 implantation promoted cardiac functional restoration, reduced infarct size, improved cardiac remodeling, and enhanced neovascularization in ischemic heart tissue. New vessels derived from MSCCXCR4 were observed at the injured heart margins and communicated with native coronary arteries. However, the derived vessel networks were reduced by GCV, reversing improvement of cardiac function. Conclusion: The transplanted MSCCXCR4 enhanced neovascularization after MI by boosting release of angiogenic factors and increasing the potential of endothelial differentiation.