There is significant interest and debate regarding the best mouse model of human disease, since studies in wild-type mice may not always recapitulate human diseases. The NSG mouse model has been one of the most commonly used mouse models to study cancer; however, this mouse model, even though it has several advantages in regard to the ease of tumor implantation and financial feasibility, does not represent human disease due to the immunodeficient nature of this model. In this study, we performed oral and pancreatic tumor studies in NSG and hu-BLT mice and found several distinguishing features that make hu-BLT model more suitable for studying human cancer. In addition, we compared the immune function of humans to hu-BLT mice to understand the differences and similarities of the models. Oral and pancreatic cancer stem cells were implanted in NSG and hu-BLT mice. Both tumors grew robustly in NSG mice and killed them within a short period of time. On the contrary, unlike NSG mice, tumor-bearing hu-BLT mice survived longer, grew smaller tumors, and the grown tumors exhibited lower rates of expansion, with a higher surface expression of MHC-class I and lower NK cell-mediated cytotoxicity that was previously shown to have more of a differentiated phenotype. Although the peripheral blood of hu-BLT mice in comparison to that of humans had lower percentages of NK cells and cytotoxic function, it mediated a higher secretion of IFN-γ, likely contributing to the differentiation of the tumor cells and subsequent decrease in the tumor size in the hu-BLT mice in comparison to the NSG mice. Spleen-derived hu-BLT mouse NK cells were able to expand in the presence of autologous osteoclasts and substantially increase both cytotoxicity and secretion of IFN-γ, similar to those seen in peripheral blood-derived human NK cells, indicating that NK cells from hu-BLT mice are capable of expansion and functional activation when activating signals are given. Thus, the many similarities between human and hu-BLT mouse immune systems make this mouse model more appropriate to study human cancer. In particular, it is well-suited for studies of allogeneic NK cell-based immunotherapy in cancer treatment. The advantages and challenges of hu-BLT mice in cancer studies are also discussed in this report.