Conditionally replicative adenovirus (CRAd) vectors are designed for specific oncolytic replication in tumor tissues with concomitant sparing of normal cells. As such, CRAds offer an unprecedented level of anticancer potential for malignancies that have been refractory to previous cancer gene therapy interventions. CRAd efficacy may, however, be compromised by inefficient dispersion of the replicating vector within the tumor tissue. To address this issue, we evaluated the utility of a fusogenic membrane glycoprotein (FMG), which induces the fusion of neighboring cellular membranes to form multinucleated syncytia. We hypothesized that the FMG-mediated syncytia would facilitate dispersion of the adenovirus (Ad) gene products and viral progeny. To test this, human immunodeficiency virus type 1 (HIV-1) envelope glycoproteins, which induce syncytia in the presence of CD4+target cells, were expressed by an Ad (Ad5HIVenv) in permissive (CD4-positive) and nonpermissive (CD4-negative) cell lines. After validating this Ad-FMG model, the efficiency of Ad replication in the presence or absence of syncytia was evaluated. The results demonstrated that syncytium formation was compatible with Ad replication and dramatically increased the dispersion of virus gene products within the cytoplasm of the syncytia as well as viral particles in the nuclei of the syncytial mass. Moreover, progeny virions were released more efficiently from syncytia compared with nonsyncytial cells. These data demonstrate the utility of FMGs as a dispersion agent and suggest that FMGs can improve the efficacy of CRAd gene therapy.