Adult human adipose-derived mesenchymal stem cells (hAMSCs) are multipotent cells, which are abundant, easily collected, and bypass the ethical concerns that plague embryonic stem cells. Their utility and accessibility have led to the rapid development of clinical investigations to explore their autologous and allogeneic cellular-based regenerative potential, tissue preservation capabilities, anti-inflammatory properties, and anticancer properties, among others. hAMSCs are typically cultured under ambient conditions with 21% oxygen. However, physiologically, hAMSCs exist in an environment of much lower oxygen tension. Furthermore, hAMSCs cultured in standard conditions have shown limited proliferative and migratory capabilities, as well as limited viability. This study investigated the effects hypoxic culture conditions have on primary intraoperatively derived hAMSCs. hAMSCs cultured under hypoxia (hAMSCs-H) remained multipotent, capable of differentiation into osteogenic, chondrogenic, and adipogenic lineages. In addition, hAMSCs-H grew faster and exhibited less cell death. Furthermore, hAMSCs-H had greater motility than normoxia-cultured hAMSCs and exhibited greater homing ability to glioblastoma (GBM) derived from brain tumor-initiating cells from our patients in vitro and in vivo. Importantly, hAMSCs-H did not transform into tumor-associated fibroblasts in vitro and were not tumorigenic in vivo. Rather, hAMSCs-H promoted the differentiation of brain cancer cells in vitro and in vivo. These findings suggest an alternative culturing technique that can enhance the function of hAMSCs, which may be necessary for their use in the treatment of various pathologies including stroke, myocardial infarction, amyotrophic lateral sclerosis, and GBM.