Hepatocellular carcinoma (HCC) displays a high resistance to tumor necrosis factor-related apoptosis-inducing ligand (TRAIL)-mediated cell death. To increase sensitivity of HCC cells to TRAIL, we have constructed an oncolytic adenoviral vector (ZD55) and used this vector to deliver second mitochondria-derived activator of caspases (Smac) and TRAIL genes (ZD55-Smac and ZD55-TRAIL, respectively) into HCC cells. Our data showed that human HCC cells express high levels of inhibitor of apoptosis proteins (IAPs). Transfected HCC cells expressing exogenous X-linked IAPs (XIAPs) displayed more resistance to TRAIL. The expression of Smac led to rapid and potent activation of apoptosis in HCC cells after infection with ZD55-Smac. The activation of caspases and induction of apoptosis could be enhanced further through coinfection with ZD55-TRAIL. The combined treatment of ZD55-Smac and ZD55-TRAIL resulted in significant reduction of XIAP expression levels. In addition, our in vivo data in mice showed only a partial response in the established tumor treated either by ZD55-Smac or ZD55-TRAIL alone. By contrast, complete tumor regression was observed by combination of ZD55-Smac and ZD55-TRAIL in all treated animals. This strong antitumoral activity achieved by this combination was due to a dramatic induction of tumor cell apoptosis in the treated tumors. In conclusion, our data indicate that Smac antagonizes the IAPs in HCC tumor cells and enhances tumor cell death induced by TRAIL in the oncolytic adenoviral vector. The combination of Smac and TRAIL delivered by way of the oncolytic adenoviral vector would provide a useful strategy for therapy of HCC and might also be applied to other IAPs abundant in cancers.