Vesicular stomatitis virus (VSV) exerts potent antitumor activity, although the molecular mechanisms underlying its oncolytic properties remain to be fully clarified. Here, we demonstrate that normally resistant murine embryonic fibroblasts are rendered highly permissive to VSV replication following cellular transformation, a progression that appears to compromise the antiviral effects of interferon (IFN). Subsequent studies revealed normal dsRNA-dependent protein kinase (PKR) activation and phosphorylation of eukaryotic initiation factor 2 (eIF2) alpha. Nevertheless, eIF2B-mediated guanine nucleotide exchange activity downstream of eIF2 was frequently aberrant in transformed cells, neutralizing eIF2alpha phosphorylation and permitting VSV mRNA translation. Thus, defects in translational regulation can cooperate with impaired IFN signaling to facilitate VSV replication, and may represent a common hallmark of tumorigenesis.