Replication-competent, attenuated herpes simplex viruses (HSV) have been demonstrated to be effective oncolytic agents in a variety of malignant tumors. Cytokine gene transfer has also been used as immunomodulatory therapy for cancer. To test the utility of combining these two approaches, two oncolytic HSV vectors (NV1034 and NV1042) were designed to express the murine GM-CSF and murine IL-12 genes, respectively. These cytokine-carrying variants were compared with the analogous non-cytokine-carrying control virus (NV1023) in the treatment of murine SCC VII squamous cell carcinoma. All three viruses demonstrated similar infection efficiency, viral replication, and cytotoxicity in vitro. SCC VII cells infected by NV1034 and NV1042 effectively produced GM-CSF and IL-12, respectively. In an SCC VII subcutaneous flank tumor model in immunocompetent C3H/HeJ mice, intratumoral injection with each virus caused a significant reduction in tumor volume compared with saline injections. The NV1042-treated tumors showed a striking reduction in tumor volume compared with the NV1023- and NV1034-treated tumors. On subsequent rechallenge in the contralateral flank with SCC VII cells, 57% of animals treated with NV1042 failed to develop tumors, in comparison with 14% of animals treated with NV1023 or NV1034, and 0% of naive animals. The increased antitumor efficacy seen with NV1042 in comparison with NV1023 and NV1034 was abrogated by CD4(+) and CD8(+) lymphocyte depletion. NV1042 is a novel, attenuated, oncolytic herpesvirus that effectively expresses IL-12 and elicits a T lymphocyte-mediated antitumor immune response against murine squamous cell carcinoma. Such combined oncolytic and immunomodulatory strategies hold promise in the treatment of cancer.