Novel approaches are needed to improve the antitumor potency and to increase the cancer specificity of oncolytic adenoviruses (Ad). We hypothesized that the combination of interferon-alpha (IFN-alpha) expression with a specific mutation in the e1a gene of Ad could target vector replication to genetic defects in the IFN-alpha pathway resulting in both improved antitumor efficacy and reduced toxicity. The conditionally replicative Ad vector KD3-IFN carries the dl1101/1107 mutation in the e1a gene that eliminates binding of E1A proteins to p300/CBP and pRb. KD3-IFN expresses human IFN-alpha in concurrence with vector replication and overexpresses the adenovirus death protein (ADP; E3-11.6K). The antitumor activity of KD3-IFN was significantly higher than that of a control vector in established human hepatocellular carcinoma tumors in immunodeficient mice and in hamster kidney cancer tumors in immunocompetent Syrian hamsters. The dl1101/1107 mutation rendered Ad replication sensitive to the antiviral effect of IFN-alpha in normal as opposed to cancer cells. These results translated to reduced vector toxicity upon systemic administration to C57BL/6 mice. The combination of Ad oncolysis, ADP overexpression, and IFN-alpha-mediated immunotherapy represents a three-pronged approach for increasing the anticancer efficacy of replicative Ads. Exploiting the dl1101/1107 mutation provides a mechanism for additional selectivity of IFN-alpha-expressing replication-competent Ads.