Oncolytic viruses are novel anticancer agents, currently under investigation in Phase I-III clinical trials. Until recently, most studies have focused on the direct antitumor properties of these viruses, although there is now an increasing body of evidence that the host immune response may be critical to the efficacy of oncolytic virotherapy. This may be mediated via innate immune effectors, adaptive antiviral immune responses eliminating infected cells or adaptive antitumor immune responses. This report summarizes preclinical and clinical evidence for the importance of immune interactions, which may be finely balanced between viral and tumor elimination. On this basis, oncolytic viruses represent a promising novel immunotherapy strategy, which may be optimally combined with existing therapeutic modalities.