Vesicular stomatitis virus (VSV) has recently been demonstrated to exhibit significant oncolytic capabilities against a wide variety of tumor models in vitro and in vivo. To potentially enhance the oncolytic effect, we generated a novel recombinant VSV (rVSV) that expressed the fusion suicide gene Escherichia coli cytosine deaminase (CD)/uracil phosphoribosyltransferase (UPRT). rVSV encoding the CD/UPRT fusion gene (VSV-C:U) exhibited normal growth properties and generated high levels of biologically active CD/UPRT that could catalyze the modification of 5-fluorocytosine into chemotherapeutic 5-fluorouracil (5-FU), which exhibited considerable bystander effect. Intratumoral inoculation of VSV-C:U in the presence of the systemically administered prodrug 5-fluorocytosine produced statistically significant reductions in the malignant growth of syngeneic lymphoma (A20) or mammary carcinoma (TSA) in BALB/c mice compared with rVSV treatments or with control 5-FU alone. Aside from detecting prolonged therapeutic levels of 5-FU in VSV-C:U-treated animals harboring TSA tumors and enhancing bystander killing of tumor cells, we demonstrated marked activation of IFN-gamma-secreting cytotoxic T cells by enzyme-linked immunospot analysis that may have also facilitated tumor killing. In conclusion, the insertion of the fusion CD/UPRT suicide gene potentiates the oncolytic efficiency of VSV by generating a strong bystander effect and by contributing to the activation of the immune system against the tumor without detrimentally altering the kinetics of virus-mediated oncolysis and may be useful in the treatment of malignant disease.