Genetically engineered, conditionally replicating herpes simplex viruses type 1 (HSV-1) are promising therapeutic agents for cancer. They can replicate in situ, spread, and exhibit oncolytic activity via a direct cytocidal effect. In addition, oncolytic HSV-1 can transfer and express foreign genes in host cells. The phase I clinical study with G207, a double-mutated HSV-1, in recurrent malignant glioma patients has shown that oncolytic HSV-1 can be safely administered into human brains. The therapeutic benefits of oncolytic HSV-1 depend on the extent of both intratumoral viral replication and induction of host antitumor immune responses. We develop new-generation oncolytic HSV-1 by enhancing these properties while retaining the safety features. G47∆ was created from G207 by introducing another genetic mutation. Compared with G207, G47∆ showed 1) better stimulation of human antitumor immune cells, 2) better growth properties leading to higher virus yields and increased cytopathic effect in vitro, 3) better antitumor efficacy in both immuno-competent and -incompetent animals, and 4) preserved safety in the brain of HSV-1-sensitive mice. Preparation is under way for a clinical trial using G47∆ in progressive glioblastoma patients. G47∆ is also suited as a backbone vector for expressing foreign molecules. Using bacterial artificial chromosome and two DNA recombinases, we have created an "armed" oncolytic HSV-1 generation system that allows insertion of transgene(s) into the genome of G47∆ in a rapid and accurate manner. We found that expression of immunostimulatory molecules can significantly enhance the antitumor efficacy of G47∆. Based on these advances, we anticipate that oncolytic virus therapy using oncolytic HSV-1 will soon be established as an important modality of cancer treatment.