Background: While Bacillus Calmette-Guérin (BCG) remains the first-line therapy for high-risk bladder cancer, 30–40% of patients develop treatment resistance necessitating radical cystectomy, some are not suitable candidates for this procedure. This underscores the critical need for novel therapeutic approaches. Emerging clinical evidence has increasingly supported the therapeutic potential of oncolytic viruses in bladder cancer treatment. Based on this clinical foundation, we investigated the anti-tumor effects of KD01, a novel type 5 recombinant oncolytic adenovirus previously developed by our team engineered to express truncated BID (tBID), in bladder cancer. Methods: The cytotoxic effects and anti-tumor efficacy of KD01 were systematically evaluated across human bladder cancer cell lines, and cell death pathways were investigated by RNA sequencing and validated. Combination therapy studies with cisplatin employed cytotoxic testing. In the final stage, the safety of KD01 bladder instillation was evaluated. Results: KD01 induced bladder cancer cell death through multiple mechanisms, including oncolysis, immunogenic cell death, and mitochondrial apoptosis. At higher doses, KD01 combined with cisplatin synergistically inhibited cancer cell proliferation and induced apoptosis. Additionally, KD01 amplified damage-associated molecular patterns (DAMPs) release and immune activation; the combination with cisplatin further enhanced the process. Safety evaluations showed favorable tolerance to intravesical perfusion with KD01. Conclusions: The dual action of KD01 in directly killing tumor cells and activating anti-tumor immunity underscores its potential as a therapeutic agent. These findings highlight the preclinical efficacy and safety of KD01, informing the design of clinical trials.