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Deregulated growth factor signaling is a major driving force in the initiation and progression of glioblastoma. The tumor suppressor and stem cell marker Lrig1 is a negative regulator of the epidermal growth factor receptor (EGFR) family. Here, we addressed the therapeutic potential of the soluble form of Lrig1 (sLrig1) in glioblastoma treatment and the mechanism of sLrig1-induced growth inhibition. With use of encapsulated cells, recombinant sLrig1 was locally delivered in orthotopic glioblastoma xenografts generated from freshly isolated patient tumors. Tumor growth and mouse survival were evaluated. The efficacy of sLrig1 and the affected downstream signaling was studied in vitro and in vivo in glioma cells displaying variable expression of wild-type and/or a constitutively active EGFR mutant (EGFRvIII). Continuous interstitial delivery of sLrig1 in genetically diverse patient-derived glioma xenografts led to strong tumor growth inhibition. Glioma cell proliferation in vitro and tumor growth in vivo were potently inhibited by sLrig1, irrespective of EGFR expression levels. Of importance, tumor growth was also suppressed in EGFRvIII-driven glioma. sLrig1 induced cell cycle arrest without changing total receptor level or phosphorylation. Affected downstream effectors included MAP kinase but not AKT signaling. Of importance, local delivery of sLrig1 into established tumors led to a 32 survival advantage in treated mice. To our knowledge, this is the first report demonstrating that sLrig1 is a potent inhibitor of glioblastoma growth in clinically relevant experimental glioma models and that this effect is largely independent of EGFR status. The potent anti-tumor effect of sLrig1, in combination with cell encapsulation technology for in situ delivery, holds promise for future treatment of glioblastoma.