Despite the proven safety of oncolytic viruses (OV) in clinical trials for glioblastoma (GBM), their efficacy has been hindered by suboptimal spreading within the tumor. We show that hyaluronan or hyaluronic acid (HA), an important component of extracellular matrix (ECM), is highly expressed in a majority of tumor xenografts established from patient-derived GBM lines that present both invasive and nodular phenotypes. Intratumoral injection of a conditionally replicating adenovirus expressing soluble hyaluronidase (ICOVIR17) into nodular GBM, mediated HA degradation and enhanced viral spread, resulting in a significant antitumor effect and mice survival. In an effort to translate OV-based therapeutics into clinical settings, we encapsulated human adipose-derived mesenchymal stem cells (MSC) loaded with ICOVIR17 in biocompatible synthetic extracellular matrix (sECM) and tested their efficacy in a clinically relevant mouse model of GBM resection. Compared with direct injection of ICOVIR17, sECM-MSC loaded with ICOVIR17 resulted in a significant decrease in tumor regrowth and increased mice survival. This is the first report of its kind revealing the expression of HA in GBM and the role of OV-mediated HA targeting in clinically relevant mouse model of GBM resection and thus has clinical implications.