The limitations of the current oncolytic adenoviruses for cancer therapy include insufficient potency and poor distribution of the virus throughout the tumor mass. To address these problems, we generated an oncolytic adenovirus expressing the hyperfusogenic form of the gibbon-ape leukemia virus (GALV) envelope glycoprotein under the control of the adenovirus major late promoter. The oncolytic properties of the new fusogenic adenovirus, ICOVIR16, were analyzed both in vitro and in vivo, and compared with that of its non-fusogenic counterpart, ICOVIR15. Our results indicate that GALV expression by ICOVIR16 induced extensive syncytia formation and enhanced tumor cell killing in a variety of tumor cell types. When injected intratumorally or intravenously into mice with large pre-established melanoma or pancreatic tumors, ICOVIR16 rapidly reduced tumor burden, and in some cases, resulted in complete eradication of the tumors. Importantly, GALV expression induced tumor cell fusion in vivo and enhanced the spreading of the virus throughout the tumor. Taken together, these results indicate that GALV expression can improve the antitumoral potency of an oncolytic adenovirus and suggest that ICOVIR16 is a promising candidate for clinical evaluation in patients with cancer.