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Smac mimetic compounds (SMCs) are anti-cancer drugs that antagonize Inhibitor of Apoptosis proteins, which consequently sensitize cancer cells to death in the presence of proinflammatory ligands such as tumor necrosis factor alpha (TNF-α). SMCs synergize with the attenuated oncolytic vesicular stomatitis virus (VSVΔ51) by eliciting an innate immune response, which is dependent on the endogenous production of TNF-α and type I interferon. To improve on this SMC-mediated synergistic response, we generated TNF-α-armed VSVΔ51 to produce elevated levels of this death ligand. Due to ectopic expression of TNF-α from infected cells, a lower viral dose of TNF-α-armed VSVΔ51 combined with treatment of the SMC LCL161 was sufficient to improve the survival rate compared to LCL161 and unarmed VSVΔ51 co-therapy. This improved response is attributed to a bystander effect whereby the spread of TNF-α from infected cells leads to the death of uninfected cells in the presence of LCL161. In addition, the treatments induced vascular collapse in solid tumors with a concomitant increase of tumor cell death, revealing another mechanism by which cytokine-armed VSVΔ51 in combination with LCL161 can kill tumor cells. Our studies demonstrate the potential for cytokine-engineered oncolytic virus and SMCs as a new combination immunotherapy for cancer treatment. Keywords: Smac mimetics, tumor necrosis factor alpha, TNF-α, vesicular stomatitis virus, VSV, oncolytic virus, vascular collapse, Smac mimetic compound, SMC, cellular inhibitor of apoptosis 1/2, cIAP1/cIAP2, cancer, immunotherapy