As we have recently found a novel oncogene, the cancer-upregulated gene 2 (CUG2), which was elevated in a variety of tumor tissues such as the ovary, liver, lung and pancreas, we examined whether reovirus could efficiently induce cytolysis in cancer cells expressing CUG2 and thus be used as a potential cancer therapeutic agent. In this study, we describe experiments in which we use reovirus to treat NIH3T3 cells stably expressing either CUG2 (NIH-CUG2) or vector only (NIH-Vec). NIH-CUG2 cells readily support reoviral proliferation and undergo apoptosis, whereas NIH-Vec cells are highly resistant to reoviral infection and virus-induced apoptosis. This notable result may be explained by the observation that CUG2 expression inhibits PKR activation, leading to reoviral proliferation in nonpermissive NIH3T3 cells. Furthermore, reovirus infection results in almost complete regression of tumorgenic NIH-CUG2 cells in transplanted nude mice. As we found that CUG2 enhances activation of MAPK (ERK, JNK and p38), Src kinase and Ras, we examined whether CUG2 confers reoviral replication independent of the Ras or p38 MAPK signaling pathway. From these experiments we found that either inhibition of p38 MAPK or Ras blocks reoviral proliferation even in the presence of CUG2 but inhibition of ERK, JNK and Src kinase does not, indicating that activation of p38 MAPK and Ras has critical roles in reoviral replication in CUG2-expressing tumor cells. Accordingly, we propose that reovirus can be useful in the treatment of transformed cells expressing CUG2, which is commonly detected in various tumor tissues.