Compositions and methods are provided that relate to an attenuated reovirus exhibiting oncolytic activity toward cancer cells while displaying reduced lytic activity toward non-malignant cells. Exemplified is an attenuated human reovirus derived from persistently infected fibrosarcoma cells that lacks wild-type reovirus S1 and S4 genes and consequently lacks a detectable reoviral outer capsid σ1 protein and expresses a mutated reoviral outer capsid σ3 protein.