We constructed a novel hepatocellular carcinoma-specific conditionally replicative adenovirus (CRAd). This adenovirus, designated Ad.HS4.AFP.E1A/TRAIL, expresses E1A to mediate viral replication and TRAIL to enhance HCC-killing efficacy under the control of a modified AFP promoter. An insulator HS-4 was placed in front of the AFP promoter to enhance the fidelity of the heterologous promoter. This virus was shown to have specific cytolytic activity in AFP-expressing HCC cells in vitro. Furthermore, the replication efficiency of Ad.HS4.AFP.E1A/TRAIL correlated well with AFP expression of the host cells, showing a 100-fold and 1 000 000-fold decrease in the low-and non-AFP-expressing HCC cells, respectively, compared to the high AFP-expressing HCC cells. An increase in mRNA of TRAIL and the elevated Caspase-3 activity were also observed in Ad.HS4.AFP.E1A/TRAIL-infected HCC cells. These results indicated that TRAIL expression from the viral vector activated the Caspase-3 enzymatic capacity and the HCC cells were sensitive to TRAIL. In vivo, Ad.HS4.AFP.E1A/TRAIL effectively prevented the growth of low AFP-expressing BEL-7404 xenografts. These results indicate that Ad.HS4.AFP.E1A/TRAIL could provide a new strategy of gene therapy for HCC.