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Abstract Background Anaplastic thyroid cancer (ATC) is one of the most aggressive of all solid tumors for which no effective therapies are currently available. Oncolytic Newcastle disease virus (NDV) has shown the potential to induce oncolytic cell death in a variety of cancer cells of diverse origins. However, whether oncolytic NDV displays antitumor effects in ATC remains to be investigated. We have previously shown that the oncolytic NDV strain FMW (NDV/FMW) induces oncolytic cell death in several cancer types. In the present study, we investigated the oncolytic effects of NDV/FMW in ATC. Methods In this study, a recombinant NDV expressing green fluorescent protein (GFP) was generated using an NDV reverse genetics system. The resulting virus was named after rFMW/GFP and the GFP expression in infected cells was demonstrated by direct fluorescence and immunoblotting. Viral replication was evaluated by end-point dilution assay in DF-1 cell lines. Oncolytic effects were examined by biochemical and morphological experiments in cultural ATC cells and in mouse models. Results rFMW/GFP replicated robustly in ATC cells as did its parent virus (NDV/FMW) while the expression of GFP protein was detected in lungs and spleen of mice intravenously injected with rFMW/GFP. We further showed that rFMW/GFP infection substantially increased early and late apoptosis in the ATC cell lines, THJ-16 T and THJ-29 T and increased caspase-3 processing and Poly (ADP-ribose) polymerase (PARP) cleavage in ATC cells as assessed by immunoblotting. In addition, rFMW/GFP induced lyses of spheroids derived from ATC cells in three-dimensional (3D) cultures. We further demonstrated that rFMW/GFP infection resulted in the activation of p38 MAPK signaling, but not Erk1/2 or JNK, in THJ-16 T and THJ-29 T cells. Notably, inhibition of p38 MAPK activity by SB203580 decreased rFMW/GFP-induced cleavage of caspase-3 and PARP in THJ-16 T and THJ-29 T cells. Finally, both rFMW/GFP and its parent virus inhibited tumor growth in mice bearing THJ-16 T derived tumors. Conclusion Taken together, these data indicate that both the recombinant reporter virus rFMW/GFP and its parent virus NDV/FMW, display oncolytic activities in ATC cells in vitro and in vivo and suggest that oncolytic NDV may have potential as a novel therapeutic strategy for ATC.