Conditionally replicative adenovirus (CRAd) mediated tumor specific gene therapy based on transcriptional control is considered a new direction for the treatment of cancer. Our previous studies showed that an HS4 insulator increased the alpha-fetoprotein (AFP) promoter-driven expression in the context of an adenovirus (Ad) vector, while retaining the highly specific gene expression in hepatoma cells in vitro and in vivo. In this study, we constructed two HS4-AFP promoter based CRAd vectors (Ad.HS4.AFP.E1a/TRAIL and Ad.HS4.AFP.E1a) with and without the expression cassette of TNF-related apoptosis-inducing ligand (TRAIL). The TRAIL-expressing virus vector, Ad.HS4.AFP.E1a/TRAIL, exhibited more obvious oncolytic effect than Ad.HS4.AFP.E1a in both high-AFP-producing HCC cell lines (Hep3B and HUH7) and a low-AFP-producing HCC cell line (PLC/PRF/5) examined, indicating endogenous TRAIL over-expression increased CRAd potency. The enhanced hepatoma cell death was mainly mediated through apoptotic mechanism, as evidenced by the activation of caspase-3, binding of annexin V and inhibition by caspase inhibitor z-vad-fmk. In s.c. xenograft of low-AFP-producing PLC/PRF/5 hepatoma model, the administration of Ad.HS4.AFP.E1a/TRAIL resulted in a more potent oncolytic effect compared with the same dose of Ad.HS4.AFP.E1a 28 days after virus exposure. This study demonstrated that the TRAIL in the context of a CRAd vector was able to increase the oncolytic activity in low-AFP-producing HCC cells in vitro and in vivo. Considering that oncolytic viruses destroy tumor cells expressing low levels of the tumor marker is a clinical concern, TRAIL might be a useful tool to improve the efficacy of these vectors.