Interleukin-12 (IL-12) has potent antitumor activity, but its clinical application is limited by severe systemic toxicity, which might be alleviated by the use of membrane-anchored IL-12. In the present study, a new membrane-bound IL-12 containing murine single-chain IL-12 and B7-1 transmembrane and cytoplasmic domains (scIL-12-B7TM) was constructed and its efficacy in cancer treatment examined and its protective antitumor mechanism investigated. Surface expression of scIL-12-B7TM on colon adenocarcinoma cells significantly inhibited the growth of subcutaneous tumors, suppressed lung metastasis, and resulted in local and systemic suppression of unmodified tumors. Intratumoral injection of an adenoviral vector encoding scIL-12-B7TM not only resulted in complete regression of a majority of local tumors, but also significantly suppressed the growth of distant, untreated tumors. Moreover, mice that had been treated with scIL-12-B7TM developed memory responses against subsequent tumor challenge. Immunohistochemical staining and in vivo depletion of lymphocyte subpopulations demonstrated that both CD8(+) T cells and CD4(+) T cells contributed to the antitumor activity of scIL-12-B7TM. Importantly, the potent antitumor activities of scIL-12-B7TM were achieved with only negligible amounts of IL-12 in the circulation. Our data demonstrate that cancer immunotherapy using membrane-bound IL-12 has the advantage of minimizing systemic IL-12 levels without compromising its antitumor efficacy.