Abstract Cancer research has long been hampered by the limitations of the current model systems. Both cultured cells and mouse xenografts grow in an environment highly dissimilar to that of their originating tumor, frequently resulting in promising treatments that are ultimately clinically ineffective. The development of highly immunodeficient mouse strains into which human immune systems can be engrafted can help bridge this gap. The need for more representative tools to investigate the human tumor microenvironment (TME) has led to the development of humanized mouse (HM) models. HM allow researchers to examine xenograft growth in the context of a human immune system and resultant tumor microenvironment, and recent studies have highlighted the increased similarities in attendant tumor structure, metastasis, and signaling to those features in cancer patients. This setting also facilitates the examination of investigational cancer therapies, including new immunotherapies. We have developed an improved method for generating mismatched humanized mice (mHM), using a dual infusion of human hematopoietic stem and progenitor cells (HSPCs) and mesenchymal stem cells (MSCs), isolated from cord blood and expanded in vitro. Engraftment with both HSPCs and MSCs produces mice with almost twice the percentage of human immune cells in their bone marrow, compared to mice engrafted with HSPCs alone, and yields 9- to 38-fold higher levels of mature peripheral human immune cells. When head and neck squamous cell carcinoma (HNSCC) tumors are implanted on the flanks of HSPC-MSC engrafted mice, human T cells, B cells, and macrophages infiltrate the stroma of these tumors at 2- to 8-fold higher ratios. In dually HSPC-MSC engrafted mice we also more frequently observed additional types of immune cells, including regulatory T cells, cytotoxic T cells, and MDSCs. Higher humanization was associated with in vivo response to immune-directed therapy. The complex immune environment arising in tumors from dually HSPC-MSC engrafted mice better resembles that of the originating patient’s tumor, suggesting an enhanced capability to accurately recapitulate a human TME. This review presentation also discusses other recent advancements in the generation and application of HM models, such as engineering mouse strains expressing human cytokines or HLA proteins, and implanting human bone, liver, and thymus tissue to facilitate immune cell maturation and trafficking. Finally, we discuss how these improvements may help direct future HM model cancer studies, and their potential in generating clinically relevant treatments. Citation Format: Antonio Jimeno. Novel approaches to study the tumor-stroma interaction and translate immune-directed therapies [abstract]. In: Proceedings of the AACR-AHNS Head and Neck Cancer Conference: Optimizing Survival and Quality of Life through Basic, Clinical, and Translational Research; 2019 Apr 29-30; Austin, TX. Philadelphia (PA): AACR; Clin Cancer Res 2020;26(12_Suppl_2):Abstract nr IA04.