Conditionally replicative adenovirus (CRAD) is an attractive anticancer agent as it can selectively replicate in tumor cells. Expression of telomerase reverse transcriptase (TERT) is a unique tumor cell characteristic, being absent in normal postmitotic cells. Thus, we constructed a TERT promoter regulated CRAD for tumor-specific oncolysis by replacing the endogenous adenovirus E1A promoter with that of human TERT (Adv-TERTp-E1A). We showed that its replication was severely attenuated in TERT-negative cells, but that it replicated almost as efficiently as wild-type adenovirus in TERT-positive cells. Accordingly, Adv-TERTp-E1A conferred cytopathicity to TERT-positive, but not TERT-negative, cells. In vivo replication of Adv-TERTp-E1A after local administration into a xenograft model of human hepatocellular carcinoma in nude mice was demonstrated by an increase in adenovirus titers in tumor extracts by several orders of magnitude between 6 h and 3 days postvector injection. Furthermore, significant inhibition of tumor growth with substantial necrotic tumor areas staining positively for adenovirus was observed with Adv-TERTp-E1A, but not with a control replication-deficient adenovirus. There was also the absence of hepatotoxicity in tumor-bearing animals after intratumoral delivery of the CRAD. The results indicate that the TERT promoter-driven CRAD is capable of tumor-selective replication and oncolysis in vitro and in vivo, and can be utilized as an adjuvant treatment agent for cancer.