Low pathogenic influenza A viruses (IAVs) have shown promising oncolytic potential in lung cancer-bearing mice. However, as replication-competent pathogens, they may cause side effects in immunocompromised cancer patients. To circumvent this problem, we genetically engineered nonreplicating IAVs lacking the hemagglutinin (HA) gene (ΔHA IAVs), but reconstituted the viral envelope with recombinant HA proteins to allow a single infection cycle. To optimize the therapeutic potential and improve immunomodulatory properties, these replication-incompetent IAVs were complemented with a murine interferon-gamma (mIFN-γ) gene. After intratracheal administration to transgenic mice that develop non-small cell lung cancer (NSCLC), the ΔHA IAVs induced potent tumor destruction. However, ΔHA IAVs armed with mIFN-γ exhibited an even stronger and more sustained effect, achieving 85% tumor reduction at day 12 postinfection. In addition, ΔHA-mIFN-γ viruses were proven to be efficient in recruiting and activating natural killer cells and macrophages from the periphery and in inducing cytotoxic T lymphocytes. Most important, both viruses, and particularly IFN-γ-encoding viruses, activated tumor-associated alveolar macrophages toward a proinflammatory M1-like phenotype. Therefore, replication-incompetent ΔHA-mIFN-γ-IAVs are safe and efficient oncolytic viruses that additionally exhibit immune cell activating properties and thus represent a promising innovative therapeutic option in the fight against NSCLC.