Genetically modified replication-selective adenoviruses are currently under human clinical trials. These anticancer agents infect host cells through their lytic nature as part of their viral life cycle to eradicate tumor mass. The lytic property of the viral infection is coupled with virus-mediated delivery of therapeutic transgenes, enhancing the potency of the virus-based therapy against a complex array of human tumors. Interleukin (IL)-12 is reported to exhibit potent anti-tumor effect by promoting NK cell and cytotoxic T cell activities. The B7 family has been shown to take an important role in stimulating anti-tumor response, and synergy between IL-12 and B7-1 for cancer immunotherapy has previously been demonstrated. To increase the potential antitumor activity of the oncolytic adenovirus, we have constructed an E1B 55kDa deleted oncolytic adenoviral vector, Y/mIL-12/mB, which expresses murine IL-12 and B7.1. The therapeutic efficacy of Y/mIL-12/mB and Y/mIL-12 was evaluated in an immunocompetent mouse bearing murine melanoma B16F10 tumor. The results showed significant inhibition of tumor growth following Y/mIL-12/mB treatment compared to PBS treated tumors. Moreover, the oncolytic adenovirus expressing IL-12 and B7.1 demonstrated enhanced antitumor activity and a higher incidence of complete tumor regression compared to tumors treated with the analogous vector (YKL-1) that lacks IL-12 and B7.1. Survival was also significantly prolonged in Y/mIL-12/mB-treated mice, and immunohistochemistry experiments demonstrated robust CD4+ and CD8+ T-cell infiltration in these mice compared to the YKL-1 subjects. In addition, we observed that Y/mIL-12/mB induced significantly higher CTL activity than YKL-1, demonstrating that anti-tumor effect is associated with the generation of tumor-specific immune response. These data indicate that local expression of IL-12 and B7.1 in tumor bed may be an attractive alternative treatment against metastatic carcinoma.