We have evaluated the feasibility of gene transduction using replication-defective adenovirus vector as a novel therapy for medullary thyroid carcinoma (MTC), a thyroid C cell neoplasm. Replication-defective adenoviruses were constructed to express murine interleukin-2 (mIL-2) gene and Escherichia coli beta-galactosidase (beta-gal; lacZ) gene under the control of the human cytomegalovirus (CMV) promoter (AdCMVmIL2, AdCMVbeta-gal) by homologous recombination. The efficiency of transduction was evaluated using AdCMVbeta-gal at different conditions. The gene transduction efficiency was dependent on multiplicity of infection, duration of exposure to the virus, and viral concentration. The expression of functional mIL-2 in transduced tumor cells was verified both in vitro and in vivo. Two cell lines (rat MTC and mMTC) secreted large amounts of functional mIL-2 after transduction, as tested in cytotoxic T lymphocyte (CTL) L-2 cells. When AdCMVmIL2-infected mMTC cells were injected s.c. into their host animals, tumors developed in 2 of 10 animals, in contrast to 9 of 10 animals injected with AdCMVbeta-gal-infected mMTC cells and all 10 animals injected with parental mMTC cells. Moreover protected animals developed a long lasting immunity against mMTC tumor cells and their splenocytes, showing cytotoxicity to parental tumor cells, and active natural killer (NK) cell activity. BALB/c-SCID (severe combined immune deficiency) mice were also used to evaluate the function of NK cells in antitumor activities. No tumor developed in SCID mice injected with AdCMVmIL2-infected cells, whereas all animals injected with either AdCMVbeta-gal-infected or parental mMTC cells developed tumors. Our data indicate that IL-2 production by MTC cells leads to rejection in syngeneic animals and suggest that both cytotoxic T cells and NK cells may play an important role. In addition, transduction of adenoviral vectors into tumor cells produces some nonspecific antitumor effects.