Clinical trials are testing oncolytic viruses (OVs) as therapies for cancer. We have shown that animals that have brain tumors and are treated with a herpes simplex virus (HSV)-derived OV live significantly longer when cyclophosphamide (CPA) is preadministered. Here, we explore the mechanisms behind this finding. In a syngeneic rat glioma model, intratumoral HSV administration is associated with rapid increase of natural killer cells, microglia/macrophages (CD68⁺ and CD163⁺), and IFN-γ. Pretreatment with CPA enhances HSV replication and oncolysis and reduces an HSV-mediated increase in CD68⁺ and CD163⁺ cells and intratumoral IFN-γ. Molecular imaging shows CPA pretreatment to inhibit HSV-induced infiltration of tumor-associated phagocytic cells. Our results reveal molecular and cellular mechanisms that inhibit intratumoral spread of HSV and suggest a therapeutic path for improving the efficacy of virotherapy as a treatment for cancer.