There is currently no available experimental system wherein human cancer cells can be grown in the context of a mixed population of normal differentiated human cells for testing biological aspects of cancer cell growth (e.g., tumor cell invasion and angiogenesis) or response to anti-cancer therapies. When implanted into immunocompromised mice, human embryonic stem cells develop teratomas containing complex structures comprising differentiated cell types representing the major germ line-derived lineages. We sought to determine whether human cancer cells would grow within such teratomas and display properties associated with malignancy, such as invasiveness and recruitment of blood vessels. HEY ovarian cancer cells stably expressing an H2A-GFP fusion protein (HEY-GFP) injected into mature teratomas developed into tumors, which allowed tracking of tumor cell invasion and recruitment of human teratoma-derived blood vessels. This provides a straightforward and powerful approach to studying the biological properties of cancer cells within the microenvironment of normal differentiated human cells.