Oncolytic viruses (OVs) as one promising antitumor methods have made important contributions to tumor immunotherapy, which arouse increasing attention. They provide the dual mechanisms including direct killing effect toward tumor cells and immune activation for elevating antitumor responses, which have been proved in many preclinical studies. Especially, natural or genetically modified viruses as clinical immune preparations have emerged as a new promising approach objective to oncology treatment. The approval of talimogene laherparepvec (T-VEC) by the U.S. Food and Drug Administration (FDA) for the therapy of advanced melanoma could be considered as a milestone achievement in the clinical translation of OV. In this review, we first discussed the antitumor mechanisms of OVs with an emphasis on targeting, replication, and propagation. We further outlined the state of the art of current OVs in tumor and underlined the activated biological effects especially including immunity. More significantly, the enhanced immune responses based on OVs were systematically discussed from different perspectives such as combination with immunotherapy, genetic engineering of OVs, integration with nanobiotechnology or nanoparticles, and antiviral response counteraction, where their principles were shed light on. The development of OVs in the clinics was also highlighted to analyze the actuality and concerns of different OV applications in clinical trials. At last, the future perspectives and challenges of OVs as an already widely accepted treatment means were discussed. This review will provide a systematic review and deep insight into OV development and also offer new opportunities and guidance pathways to drive the further clinical translation.