The immunosuppressive microenvironment of solid tumors renders adoptively transferred T cells hypofunctional. However, adenoviral delivery of immunostimulatory cytokines IL2 and TNFα can significantly improve the efficacy of adoptive T-cell therapy. Using ret transgenic mice that spontaneously develop skin malignant melanoma, we analyzed the mechanism of action of adenoviruses coding for IL2 and TNFα in combination with adoptive transfer of TCR-transgenic TRP-2-specific T cells. Following T-cell therapy and intratumoral virus injection, a significant increase in antigen-experienced, tumor-reactive PD-1 CD8 T cells was seen in both cutaneous lesions and in metastatic lymph nodes. A reverse correlation between tumor weight and the number of tumor-reactive PD-1 tumor-infiltrating lymphocytes (TILs) was observed, suggesting that these T cells could target and kill tumor cells. It is interesting to note that, local expression of cytokines did not affect intratumoral levels of T-regulatory cells (Tregs), which had previously been associated with systemic IL2 therapy. Instead, Ad5-IL2 induced upregulation of IL2 receptor α-chain (CD25) on conventional CD4CD25Foxp3 cells, indicating that these CD4 T cells may contribute to CD8 T-cell activation and/or homing. Signs of therapy-induced resistance were also observed as the expression of PD-L1 on tumor-infiltrating granulocytic myeloid-derived suppressor cells was upregulated as a reaction to PD-1+ TILs. Finally, beneficial ratios between tumor-reactive PD-1 CD8 TILs and immunosuppressive cell subsets (Tregs and nitric oxide-producing myeloid-derived suppressor cells) were observed in primary and secondary tumor sites, indicating that local delivery of IL2 and TNFα coding adenoviruses can systemically modify the cellular composition of the tumor microenvironment in favor of adoptively transferred T cells.