Background The expression of therapeutic gene and its anti-tumor effects will be augmented and a synergism of oncolytic virus with the therapeutic gene is speculated. This study was undertaken to assess the anti-tumor effects of a novel gene-viral therapeutic system CNHK300-mEndostatin (CNHK300-mE) in hepatocellular carcinoma (HCC). Methods A novel gene-viral therapeutic system named CNHK300-mE was constructed using the human telomerase reverse transcriptase (hTERT) promoter to drive the expression of the adenovirus E1A gene and cloning the therapeutic gene mouse endostatin into the adenovirus genome. By the tissue culture infectious dose 50 (TCID50) method and cytoviability assay, the replicative and cytolytic capabilities of CNHK300-mE in two HCC lines (HepGII and Hep3B) and one normal cell line (MRC-5) were analyzed, and the transgene expressions of mouse endostatin in vitro and in vivo were detected by West blotting and ELISA assay. Tumor growth suppression and anti-angiogenesis effects in vivo were investigated using nude mice xenografts model derived from SMMC-7721 HCC cells. Results The 3296-fold replicating capacity of CNHK300-mE in HCC cell lines versus in the normal cell line at 96 hours post infection and the 25-fold effective dose for killing 50% cells (ED50) in the normal cell line versus HCC cell lines, which were both superior to ONYX-015, were observed. Tumor growth suppression of CNHK300-mE superior to either Ad-mE or ONYX-015 was demonstrated (P<0.01) and the anti-angiogenic effects in vivo superior to Ad-mE were also observed with immunohistochemical staining of von Willebrand factor. In comparison with non-replicative adenovirus Ad-mE, the transgene expression of mE mediated by CNHK300-mE was significantly higher in vitro (P<0.005) and in vivo (P<0.05). Conclusion Being capable of replicating in and lysing the telomerase-positive HCC cells and mediating effective expression of the therapeutic gene in vitro and in vivo, the novel gene-viral therapeutic system CNHK300-mE is potentially effective in the treatment of HCC.