RNA interference (RNAi) induced by small interfering RNA (siRNA) can trigger sequence-specific gene silencing in mammalian cells. It has been proposed that siRNA can be developed as a novel strategy for cancer therapy. However effective delivery of therapeutically active siRNAs into the target tissue/cells in vivo is still a major obstacle for successful application. Oncolytic adenoviral vector mediated RNAi provides the potential advantages of minimizing the harm of normal cells, regenerating siRNAs within the tumor microenvironment and inspiring an additive antitumor outcome through viral oncolysis. Hepatocellular carcinoma (HCC) displays a high resistance to tumor necrosis factor-related apoptosis-inducing ligand (TRAIL)-mediated cell death, partially due to high expression levels of the X-linked Inhibitor-of-Apoptosis protein (XIAP). Here, we utilized an oncolytic adenovirus (ZD55) for expressing short hairpin RNA (shRNA), a precursor of siRNA, to knockdown XIAP. To increase sensitivity of HCC cells to TRAIL, we have used ZD55 to deliver both XIAP-shRNA and TRAIL into HCC cells. The results showed that the combination of ZD55-XIAP-shRNA and ZD55-TRAIL resulted in significant reduction of XIAP expression and potent antitumor activity both in HCC cells and in animal model with tumor. This pilot study offers a promise of using oncolytic adenovirus to deliver siRNA targeting overexpressed oncogenes and a novel strategy for cancer therapy by regulating the equilibrium between the proapoptotic and antiapoptotic factors.