The use of genetically engineered, replication-selective viruses to treat cancer is being realized with viruses such as ONYX-015, a human adenovirus that selectively destroys p53 mutant cancer cells. To enhance further the clinical efficacy of ONYX-015 and viruses like it, we have developed a novel gene delivery system for replicating adenoviruses. This system has two unique features. First, it uses the endogenous adenoviral gene expression machinery (promoter, splicing, polyadenylation) to drive transgene expression. Second, a single region or gene in the multi-gene E3 transcription unit is selectively substituted for by the therapeutic transgene(s). Analyzing various transgene substitutions for the 6.7 K/gp19 K region of E3, we demonstrate the following: (1) transgene expression in this system is predictable and mimics the substituted endogenous gene expression pattern, (2) expression of surrounding E3 genes can be retained, (3) the insertion site choice can effect both the transgene expression level and the viral life cycle, and, (4) expression levels from this system are superior to those generated from a replication-defective virus using the HCMV enhancer-promoter and this is dependent on viral DNA replication. This unique methodology has broad application to the rapidly evolving field of replicating virus-based therapies.