The potential for expressing the bacterial enzyme carboxypeptidase G2 (CPG2) tethered to the outer surface of mammalian cells was examined for use in gene-directed enzyme prodrug therapy. The affinity of CPG2 for the substrate methotrexate was unaffected by three mutations required to prevent N-linked glycosylation. Breast carcinoma MDA MB 361 cells expressing CPG2 internally showed only a very modest increase in sensitivity to the prodrug CMDA because the prodrug did not enter the cells. Cells expressing surface-tethered CPG2, however, became 16–24-fold more sensitive to CMDA and could mount a good bystander effect. Systemic administration of CMDA to mice bearing established xenografts of the transfected cells led to sustained tumor regressions or cures.