Malignant solid tumors remain a significant clinical challenge, necessitating innovative therapeutic approaches. Oncolytic viral therapy is a nonmutagenic, biological anticancer therapeutic shown to be effective against human cancer in early studies. Because matrix metalloproteinases (MMP) play important roles in the pathogenesis and progression of cancer, we sought to determine if “arming” an oncolytic herpes simplex virus (oHSV) with an MMP-antagonizing transgene would increase virus-mediated antitumor efficacy. We generated oHSVs that express human tissue inhibitor of metalloproteinases 3 (TIMP3) or firefly luciferase and designated them rQT3 and rQLuc, respectively. We evaluated the antitumor efficacy of these viruses against neuroblastoma and malignant peripheral nerve sheath tumor (MPNST) xenografts. Relative to rQLuc, rQT3-infected primary human MPNST and neuroblastoma cells exhibited equivalent virus replication but increased cytotoxicity and reduced MMP activity. In vivo, rQT3-treated tumors showed delayed tumor growth, increased peak levels of infectious virus, immature collagen extracellular matrix, and reduced tumor vascular density. Remarkably, rQT3 treatment reduced circulating endothelial progenitors, suggesting virus-mediated antivasculogenesis. We conclude that rQT3 enhanced antitumor efficacy through multiple mechanisms, including direct cytotoxicity, elevated virus titer, and reduced tumor neovascularization. These findings support the further development of combined TIMP-3 and oncolytic virotherapy for cancer. [Cancer Res 2008;68(4):1170–9]