Oncolytic adenoviral vectors are currently being developed as biologic anticancer agents. Coupling the lytic function of an oncolytic adenovirus (Ad) with its ability as a transgene delivery system represents a powerful extension of this methodology. A clear advantage is the amplification of a therapeutic gene, as replicating vectors would be able to infect and deliver the gene of interest to neighboring cells. Granulocyte-macrophage colony-stimulating factor (GM-CSF) is one of the most potent stimulators of a specific and long-lasting antitumor immunity and its important role in the maturation of antigen-presenting cells to induce T-cell activation has been well documented. Similarly, the B7 family has also been shown to play an integral role in mediating an antitumor response. Most tumor cells, however, lack the expression of these costimulatory molecules on their surface, thus escaping immune system recognition. To increase the antitumor effect of an oncolytic Ad, we have generated an E1B 55 kDa-deleted oncolytic adenoviral vector, YKL-GB, that expresses both GM-CSF and B7-1. The therapeutic efficacy of YKL-GB Ad was evaluated in immunocompetent mice bearing murine melanoma B16-F10 tumors. Significant inhibition of tumor growth was seen in mice treated with YKL-GB compared to those treated with the analogous vector, YKL-1. Moreover, YKL-GB oncolytic Ad demonstrated enhanced antitumor activity and higher incidences of tumor regression compared to a replication-incompetent Ad, dl-GB, which coexpresses GM-CSF and B7-1. Localized GM-CSF and B7-1 gene transfer also conferred long-lasting immunity against a tumor re-challenge. To establish that the observed antitumor effect is associated with the generation of a tumor-specific immune response, we carried out interferon-gamma enzyme-linked immune spot assay. We observed that YKL-GB induced significantly higher immune cell activation than YKL-1. Furthermore, immunohistochemical studies demonstrated robust dendritic cells and CD4(+)/CD8(+) T-cell infiltration in these mice compared to the YKL-1-treated groups. In agreement with these results, splenocytes from tumor-bearing mice treated with YKL-GB expressed high levels of the costimulatory and activation molecules. These findings demonstrate the effectiveness of enhancing the immune response against tumors with an oncolytic Ad expressing both GM-CSF and B7-1 and provide a potential therapeutic strategy for the management of neoplasia.