Oncolytic viruses are known to stimulate the antitumor immune response by specifically replicating in tumor cells. This is believed to be an important aspect of the durable responses observed in some patients and the field is rapidly moving toward immunotherapy. As a further means to engage the immune system, we engineered a virus, vesicular stomatitis virus (VSV), to encode the proinflammatory cytokine interferon-γ. We used the 4T1 mammary adenocarcinoma as well as other murine tumor models to characterize immune responses in tumor-bearing animals generated by treatment with our viruses. The interferon-γ-encoding virus demonstrated greater activation of dendritic cells and drove a more profound secretion of proinflammatory cytokines compared to the parental virus. From a therapeutic point of view, the interferon-γ virus slowed tumor growth, minimized lung tumors, and prolonged survival in several murine tumor models. The improved efficacy was lost in immunocompromized animals; hence the mechanism appears to be T-cell-mediated. Taken together, these results demonstrate the ability of oncolytic viruses to act as immune stimulators to drive antitumor immunity as well as their potential for targeted gene therapy.