Cancer-associated fibroblasts (CAFs) perform diverse roles and can modulate therapy responses1. The inflammatory environment within tumours also influences responses to many therapies, including the efficacy of oncolytic viruses2; however, the role of CAFs in this context remains unclear. Furthermore, little is known about the cell signalling triggered by heterotypic cancer cell-fibroblast contacts and about what activates fibroblasts to express inflammatory mediators1,3. Here, we show that direct contact between cancer cells and CAFs triggers the expression of a wide range of inflammatory modulators by fibroblasts. This is initiated following transcytosis of cytoplasm from cancer cells into fibroblasts, leading to the activation of STING and IRF3-mediated expression of interferon-β1 and other cytokines. Interferon-β1 then drives interferon-stimulated transcriptional programs in both cancer cells and stromal fibroblasts and ultimately undermines the efficacy of oncolytic viruses, both in vitro and in vivo. Further, targeting IRF3 solely in stromal fibroblasts restores oncolytic herpes simplex virus function.