The adenovirus E1A proteins are involved in the transcriptional activation of viral and cellular genes needed for controlling cell cycle and virus replication. Undifferentiated embryonic carcinoma cells have the ability to produce an E1A-like activity that can induce the expression of E1A-targeted adenoviral and cellular genes in the absence of the E1A products. Differentiated embryonic carcinoma cells lose the ability to produce the E1A-like activity. In this study, we investigated the E1A-like activity in cancer cells with an adenovirus having a mutated E1a gene. The mutation is generated by the insertion of a large DNA fragment in the E1a gene and interrupts the COOH-terminal region of both the E1A 12S and 13S proteins. The E1a-mutated virus can efficiently replicate in HepG2 and Hep3B liver cancer cells and produce high titers of virus. Replication of the E1a-mutated virus inhibits tumor formation and destroys tumors in vivo. The results obtained in this study imply that cancer cells may produce an E1A-like activity to support the selective replication of mutated virus in cancer cells. In addition, we found that although the E1a-mutated virus could not replicate in Huh1.cl2 liver cells, the viral DNA could amplify in the cells. This result suggests that replication of adenoviral DNA is necessary, but not sufficient, for generating infectious viral progeny and destroying tumor cells.