Reovirus, a potential cancer therapy, replicates more efficiently in Ras-transformed cells than in non-transformed cells. It was presumed that increased translation was the mechanistic basis of reovirus oncolysis. Analyses of each step of the reovirus life cycle now show that cellular processes deregulated by Ras transformation promote not one but three viral replication steps. First, in Ras-transformed cells, proteolytic disassembly (uncoating) of the incoming virions, required for onset of infection, occurs more efficiently. Consequently, threefold more Ras-transformed cells become productively infected with reovirus than non-transformed cells, which accounts for the observed increase of reovirus proteins in Ras-transformed cells. Second, Ras transformation increases the infectious-to-noninfectious virus particle ratio, as virions purified from Ras-transformed cells are fourfold more infectious than those purified from non-transformed cells. Progeny assembled in non- and Ras-transformed cells appear similar by electron microscopy and sodium dodecyl sulfate polyacrylamide gel electrophoresis (SDS-PAGE) analysis, suggesting that Ras transformation introduces a subtle change necessary for virus infectivity. Finally, reovirus release, mediated by caspase-induced apoptosis, is ninefold more efficient in Ras-transformed cells. The combined effects of enhanced virus uncoating, infectivity, and release result in >100-fold differences in virus titers within one round of replication. Our analysis reveals previously unrecognized mechanisms by which Ras transformation mediates selective viral oncolysis.