JX-594 is a targeted and granulocyte macrophage-colony stimulating factor (GM-CSF)-expressing oncolytic poxvirus designed to selectively replicate in and destroy cancer cells through viral oncolysis and tumor-specific immunity. In order to study the mechanisms-of-action (MOA) of JX-594 in humans, a mechanistic proof-of-concept clinical trial was performed at a low dose equivalent to ≤10% of the maximum-tolerated dose (MTD) in other clinical trials. Ten patients with previously treated stage IV melanoma were enrolled. Tumors were injected weekly for up to nine total treatments. Blood samples and tumor biopsies were analyzed for evidence of transgene activity, virus replication, and immune stimulation. The Β-galactosidase (Β-gal) transgene was expressed in all patients as evidenced by antibody induction. Six patients had significant induction of GM-CSF-responsive white blood cell (WBC) subsets such as neutrophils (25-300% increase). JX-594 replication and subsequent shedding into blood was detectable in five patients after cycles 1-9. Tumor biopsies demonstrated JX-594 replication, perivascular lymphocytic infiltration, and diffuse tumor necrosis. Mild flu-like symptoms were the most common adverse events. In sum, JX-594 replication, oncolysis, and expression of both transgenes were demonstrated; replication was still evident after multiple cycles. These findings have implications for further clinical development of JX-594 and other transgene-armed oncolytic viruses.