Emerging data suggest that locoregional cancer therapeutic approaches with oncolytic viruses can lead to systemic anti-tumour immunity, although the appropriate targets for intratumoral immunomodulation using this strategy are not known. Here we find that intratumoral therapy with Newcastle disease virus (NDV), in addition to the activation of innate immunity, upregulates the expression of T-cell co-stimulatory receptors, with the inducible co-stimulator (ICOS) being most notable. To explore ICOS as a direct target in the tumour, we engineered a recombinant NDV-expressing ICOS ligand (NDV-ICOSL). In the bilateral flank tumour models, intratumoral administration of NDV-ICOSL results in enhanced infiltration with activated T cells in both virus-injected and distant tumours, and leads to effective rejection of both tumours when used in combination with systemic CTLA-4 blockade. These findings highlight that intratumoral immunomodulation with an oncolytic virus expressing a rationally selected ligand can be an effective strategy to drive systemic efficacy of immune checkpoint blockade.