In the field of gene therapy using retroviral vectors, it appears impossible to introduce a foreign gene into all target cells. Therefore adjacent cell killing, the socalled bystander effect, caused by genetically modified cells provides therapeutic advantages for gene therapy against cancers. We retrovirally transduced the herpes simplex virus thymidine kinase (HSV-tk) gene into murine and rat hepatocellular carcinoma (HCC) cells. These HSV-tk gene-transduced HCC cells were cocultured with the corresponding parental cells in the presence of ganciclovir, at a concentration not at all cytotoxic to the parental cells. When parental HCC cells were cocultured with their HSV-tk gene-transduced counterparts at a high density at which most cells were in contact with one another, they were markedly eliminated. Conversely, when cocultured at a low density at which none of the cells were in contact, a weak but statistically significant bystander effect was observed. Addition of lysates of HSV-tk gene-transduced cells in the presence of ganciclovir did not cause and killing of parental cells. Furthermore, media conditioned by transduced cells with ganciclovir exhibited weak cytotoxic effects on parental cells. These results indicate that cell-cell contact plays a major causative role in the bystander effect and that minor contributors to this phenomenon are some cytotoxic substance released from transduced cells. Importantly, the bystander effect was induced in vivo as well as in vitro. When mixtures of transduced and untransduced HCC cells were implanted into the flank region of mice, intraperitoneal ganciclovir administration considerably inhibited tumor development, indicating the feasibility of gene therapy with HSV-tk gene and ganciclovir against HCC.