Osteosarcoma (OS) is a primary bone malignancy characterized by an aggressive nature, limited treatment options, low survival rate, and poor patient prognosis. Conditionally replicative adenoviruses (CRAds) armed with immune checkpoint inhibitors hold great potential for enhanced therapeutic efficacy. The present study aims to investigate the anti-tumor efficacy of CAV2-AU-M2, a CAV2-based CRAd armed with an anti-PD-1 single-domain antibody (sdAb), against OS cell lines in vitro. The infection, conditional replication, cytopathic effects, and cytotoxicity of CAV2-AU-M2 were tested in four different OS cell lines in two-dimensional (2D) and three-dimensional (3D) cell cultures. CAV2-AU-M2 showed selective replication in the OS cells and induced efficient tumor cell lysis and death. Moreover, CAV2-AU-M2 produced an anti-PD-1 sdAb that demonstrated effective binding to the PD-1 receptors. This study demonstrated the first CRAd armed with an anti-PD-1 sdAb. This combined approach of two distinct immunotherapies is intended to enhance the anti-tumor immune response in the tumor microenvironment.