Adenoviruses (Ad) have been investigated for their efficacy in reducing primary tumors after local intratumoral administration. Despite high Ad concentrations and repetitive administration, the therapeutic efficacy of Ad has been limited because of rapid dissemination of the Ad into the surrounding normal tissues and short maintenance of Ad biological activity in vivo. To maximize the therapeutic potential of Ad-mediated gene therapeutics, we investigated the efficacy of local, sustained Ad delivery, using an injectable alginate gel matrix system. The biological activity of Ad loaded in alginate gel was prolonged compared with naked Ad, as evidenced by the high green fluorescent protein gene transduction efficiency over an extended time period. Moreover, oncolytic Ad encapsulated in alginate gel elicited 1.9- to 2.4-fold greater antitumor activity than naked Ad in both C33A and U343 human tumor xenograft models. Histological and quantitative PCR analysis confirmed that the oncolytic Ad/alginate gel matrix system significantly increased preferential replication and dissemination of oncolytic Ad in a larger area of tumor tissue in vivo. Taken together, these results show that local sustained delivery of oncolytic Ad in alginate gel augments therapeutic effect through selective infection of tumor cells, sustained release and prolonged maintenance of Ad activity.