In vivo delivery of immunomodulatory genes is a promising strategy for solid tumor vaccination. A drawback is that it necessitates induction of a large effect from transgene expression in a small percentage of tumor cells. Although the B7 family is known to be the most potent of the costimulatory molecules, gene transduction of B7 alone has not been effective in inducing antitumor immunity in nonimmunogenic tumors by ex vivo methods, much less in vivo. We have developed a novel approach where a gene encoding soluble B7-1, a fusion protein of the extracellular domain of murine B7-1 and the Fc portion of human IgG1, is delivered to tumor cells in vivo in the context of an oncolytic replication-competent herpes simplex virus, and the gene product is secreted by tumor cells rather than expressed on the cell surface. Defective herpes simplex virus vectors containing the B7-1-immunoglobulin (B7-1-Ig) fusion transgene (dvB7Ig) were generated using G207 as a helper virus and tested in the poorly immunogenic murine neuroblastoma, Neuro2a, in syngeneic A/J mice. Intraneoplastic inoculation of dvB7Ig/G207 at a low titer successfully inhibited the growth of established s.c. tumors, despite the expression of B7-1-Ig being detected in only 1% or fewer of tumor cells at the inoculation site, and prolonged the survival of mice bearing intracerebral tumors. Immunohistochemistry of dvB7Ig/G207-inoculated tumors revealed a significant increase in CD4+ and CD8+ T-cell infiltration compared with control tumors inoculated with defective vector expressing alkaline phosphatase (dvAP/G207). The antitumor effect of dvB7Ig/G207 was not manifested in athymic mice. In vivo depletion of immune cell subsets in A/J mice further revealed that CD8+ T cells, but not CD4+ T cells, were required. Animals cured of their tumors by dvB7Ig/G207 treatment were protected against rechallenge with a lethal dose of Neuro2a cells but not SaI/N cells. The results demonstrate that the use of soluble B7-1 for immune gene therapy is a potent and clinically applicable means of in situ cancer vaccination.