Oncolytic viruses (OVs) are characterised by their preference for infecting and replicating in tumour cells either naturally or after genetic modification, resulting in oncolysis. Furthermore, OVs can elicit both local and systemic anticancer immune responses while specifically infecting and lysing tumour cells. These characteristics render them a promising therapeutic approach for paediatric brain tumours (PBTs). PBTs are frequently marked by a cold tumour immune microenvironment (TIME), which suppresses immunotherapies. Recent preclinical and clinical studies have demonstrated the capability of OVs to induce a proinflammatory immune response, thereby modifying the TIME. In-depth insights into the effect of OVs on different cell types in the TIME may therefore provide a compelling basis for using OVs in combination with other immunotherapy modalities. However, certain limitations persist in our understanding of oncolytic viruses’ ability to regulate the TIME to enhance anti-tumour activity. These limitations primarily stem from the translational limitations of model systems, the difficulties associated with tracking reliable markers of efficacy throughout the course of treatment and the role of pre-existing viral immunity. In this review, we describe the different alterations observed in the TIME in PBTs due to OV treatment, combination therapies of OVs with different immunotherapies and the hurdles limiting the development of effective OV therapies while suggesting future directions based on existing evidence.