Murine mesenchymal stem cells are capable of differentiation into multiple cell types both in vitro and in vivo and may be good candidates to use as cell therapy for diseased or damaged organs. We have previously reported a method of enriching a population of murine MSCs that demonstrated a diverse differentiation potential both in vitro and in vivo. In this study, we show that this enriched population of murine mesenchymal stem cells embolize within lung capillaries following systemic injection and then rapidly expand within, and invade into, the lung parenchyma, forming tumor nodules. These lesions rarely contain cells bearing the immunohistochemical characteristics of lung epithelium, but they do show the characteristics of immature bone and cartilage that resembles exuberant fracture callus or well-differentiated osteosarcoma. Our findings indicate that murine mesenchymal stem cells can behave in a manner similar to tumor cells, with dysregulated growth and aberrant differentiation within the alveolar microenvironment after four passages. We demonstrate that unlike human MSCs, MSCs from different mouse strains can acquire chromosomal abnormalities after only a few in vitro passages. Moreover, other parameters, such as mouse strain used, might also play a role in the induction of these tumors. These findings might be clinically relevant for future stem cell therapy studies. Disclosure of potential conflicts of interest is found at the end of this article.