Specific niches within the tumor bone marrow (BM) microenvironment afford a sanctuary for multiple myeloma (MM) clones due to stromal cell-tumor cell interactions, which confer survival advantage and drug resistance. Defining the sequelae of tumor cell interactions within the MM niches on an individualized basis may provide the rationale for personalized therapies. To mimic the MM niche, we here describe a new 3D co-culture ex-vivo model in which primary MM patient BM cells are co-cultured with mesenchymal stem cells (MSC) in a hydrogel 3D system. In the 3D model, MSC with conserved phenotype (CD73+CD90+CD105+) formed compact clusters with active fibrous connections, and retained lineage differentiation capacity. Extracellular matrix molecules, integrins, and niche related molecules including N-cadherin and CXCL12 are expressed in 3D MSC model. Furthermore, activation of osteogenesis (MMP13, SPP1, ADAMTS4, and MGP genes) and osteoblastogenic differentiation was confirmed in 3D MSC model. Co-culture of patient-derived BM mononuclear cells with either autologous or allogeneic MSC in 3D model increased proliferation of MM cells, CXCR4 expression, and SP cells. We carried out immune profiling to show that distribution of immune cell subsets was similar in 3D and 2D MSC model systems. Importantly, resistance to novel agents (IMiDs, bortezomib, carfilzomib) and conventional agents (doxorubicin, dexamethasone, melphalan) was observed in 3D MSC system, reflective of clinical resistance. This 3D MSC model may therefore allow for studies of MM pathogenesis and drug resistance within the BM niche. Importantly, ongoing prospective trials are evaluating its utility to inform personalized targeted and immune therapy in MM.