mda-7/IL-24 (HGMW-approved symbol IL24) is a tumor suppressor gene whose expression is lost during tumor progression. Gene transfer using adenoviral mda-7/IL-24 (Ad-mda7) exhibits minimal toxicity on normal cells while inducing potent apoptosis in a variety of cancer cell lines. Ad-mda7-transduced cells express high levels of MDA-7 protein intracellularly and also secrete a soluble form of MDA-7 protein. In this study, we sought to determine whether the intracellular or secreted MDA-7 protein was responsible for anti-tumor activity in H1299 lung tumor cells. Ad-mda7 transduction of lung tumor cells increased expression of stress-related proteins, including BiP, GADD34, PP2A, caspases 7 and 12, and XBP-1, consistent with activation of the UPR pathway, a key sensor of endoplasmic reticulum (ER)-mediated stress. Blocking secretion of MDA-7 did not inhibit apoptosis, demonstrating that intracellular MDA-7 was responsible for cytotoxicity. Consistent with this result, when applied directly to lung cancer cells, soluble MDA-7 protein exhibited minimal cytotoxic effect. We then generated mda-7 expression constructs using vectors that target the expressed protein to various subcellular compartments, including cytoplasm, nucleus, and ER. Only full-length and ER-targeted MDA-7 elicited cell death in tumor cells. Thus in lung cancer cells, Ad-mda7 activates the UPR stress pathway and induces apoptosis via intracellular MDA-7 expression in the secretory pathway.