A fully intact immune system would be expected to hinder the efficacy of oncolytic virotherapy by inhibiting viral replication. Simultaneously, however, it may also enhance antitumor therapy through initiation of pro-inflammatory, antiviral cytokine responses at the tumor site. The aim of the current study was to investigate the role of a fully intact immune system upon the antitumor efficacy of an oncolytic virus. In this respect, injection of oncolytic Vesicular Stomatitis Virus (VSV) into subcutaneous B16ova melanomas in C57Bl/6 mice leads to tumor regression, but it is not associated with viral replicative burst in the tumor. In contrast, intratumoral delivery of VSV induces an acute proinflammatory reaction, which quickly resolves concomitantly with virus clearance. Consistent with the hypothesis that therapy may not be dependent upon the ability of VSV to undergo progressive rounds of replication, a single-cycle VSV is equally effective as a fully replication-competent VSV, whereas, inactivated viruses do not generate therapy. Even though therapy is dependent upon host CD8+ and NK cells, these effects are not associated with IFN-γ-dependent responses against either the virus or tumor. There is, however, a strong correlation between viral gene expression, induction of proinflammatory reaction in the tumor and in vivo therapy. Overall, our results suggest that acute innate antiviral immune response, which rapidly clears VSV from B16ova tumors, is associated with the therapy observed in this model. Therefore, the antiviral immune response to an oncolytic virus mediates an intricate balance between safety, restriction of oncolysis and, potentially, significant immune-mediated antitumor therapy.