Oncolytic adenoviruses, also called conditionally replicating adenoviruses (CRADs), have been widely applied in cancer gene therapy. However, the construction of CRADs is still time-consuming. In this study, we attempted to establish a simplified method of generating CRADs based on AdEasy system. A novel plasmid pTE-TPE-GM was constructed, containing sequentially positioned promoter of telomerase reverse transcriptase (TERTp), coding sequence of E1A gene, promoter of E1B gene, granulocyte-macrophage colony-stimulating factor (GM-CSF) gene, internal ribosome entry site sequence and coding sequence of E1B55K gene. The CRAD-generating system reported here include three plasmids: pTE-TPE-GM, pShuttle-CMV and AdEasy-1, one Escherichia coli strain BJ5183, and the packaging cell line 293. Using this system, an oncolytic adenovirus carrying B7-1 (CD80) and GM-CSF genes was successfully constructed and designated as Ad-CD80-TPE-GM. The expression of GM-CSF increased more than 9000 times in tumor cell lines infected by Ad-CD80-TPE-GM at a multiplicity of infection (MOI) of 5, compared with the cells infected by replication-defective control virus. Similarly, the expression of CD80 also increased 9-140 times. Ad-CD80-TPE-GM selectively replicates in TERT-positive tumor cells, and the progeny viruses can reach up to 375 infection units (IU) per cell. In vitro study showed that the Ad-CD80-TPE-GM induced an obvious oncolytic effect at MOI of 0.1, and killed about 80% TERT-positive tumor cells within 7 days at an MOI of 1. The antitumor effect of this vector was also investigated in Hep2 xenograft model of nude mice, and the tumor inhibition rate reached 74% at day 30 after the administration with a total dose of 1 x 10(9) IU Ad-CD80-TPE-GM. Intratumoral injection of Ad-CD80-TPE-GM slightly induced neutralizing antibody against the oncolytic adenovirus in nude mice, which might contribute to the virus clearance in vivo. In conclusion, we successfully constructed an oncolytic CRAD carrying GM-CSF and CD80 gene. More importantly, this system can be modified to generate novel transcriptionally regulated CRADs with different tissue-specific promoters or transgenes.