Background: We have confirmed that injection of vector-based short hairpin RNA (shRNA) constructs targeting insulin-like growth factor binding protein-3 (IGFBP-3) in penis in old rat can improve erectile function. The aim of this study is to further determine the feasibility of bone marrowe derived mesenchymal stem cells (BM-MSCs) genetically modified with shRNA constructs targeting IGFBP-3 on improving erectile function in the aged rat. Methods: 40 old (24 months) male rats were randomized divided into 4 groups: PBS-only, BM-MSC treatment and LV3-shIGFBP-3 engineered BM-MSC treatment group (n=10/group).Ten 5-month-old rats were used as the young group. Four weeks after transplantation, the erectile function was assessed by cavernosal nerve stimulation. The percent of smooth muscle in corpus cavernosum was evaluated by masson’s trichrome staining. IGFBP-3 expression was estimated by Western blot. The cavernous insulin-like growth factor-1 (IGF-1) and vascular endothelial growth factor (VEGF) levels were analyzed after transplantation. Apoptosis in corpus cavernosum was measured using TUNEL and the activity of nitric oxide synthase (NOS) and concentration of guanosine 3’, 5’-cyclic-monophosphates (cGMP) in penile tissue were also analyzed. Results: Four weeks after intracavernous injection, BM-MSCs alone, especially LV3-shIGFBP-3 engineered BM-MSCs treatment rats had improvements in erectile function (p<0.05). The percentage of cavernosal smooth muscle was increased in BM-MSCs and LV3-shIGFBP-3 engineered BM-MSCs treatment group. IGFBP-3 protein expression was decreased obviously after injection of LV3-shIGFBP-3 engineered BM-MSCs. In addition, significant lower IGFBP-3 expression was associated with increased IGF-1 expression in LV3-shIGFBP-3 engineered BM-MSCs treatment rats although higher IGF-1 and VEGF concentrations were all determined after transplantation with BM-MSCs alone or BM-MSCs modified with LV3-shIGFBP-3. Lower levels of the apoptosis were also observed in the BM-MSCs and LV3-shIGFBP-3 engineered BM-MSCs treatment group. NOS activities and cGMP concentrations were also significantly increased after transplantation. Conclusions: These findings demonstrate that BM-MSCs alone or genetically modified with LV3-shIGFBP-3 can improve diminished erectile responses in the aged rat partially by increasing the smooth muscle integrity, increasing secretion of IGF-1 and VEGF, inhibiting apoptosis and increasing the NOS activity and cGMP accumulation.