Newcastle disease virus (NDV) oncolysis is believed to be facilitated by a defective Type I interferon (IFN) response. We compared hepatocellular carcinoma (HCC)-derived cell lines and found that TRAIL-resistant cells were more susceptible to NDV oncolysis than were TRAIL-sensitive cells. In examining the IFN response, we found that basal expression of the IFN-stimulated gene (ISG)-12a was low in TRAIL-resistant but high in TRAIL-sensitive cells, and ISG12a over-expression or silencing enhanced or reduced their TRAIL sensitivities, respectively. Moreover, ISG12a over-expression in TRAIL-resistant cells decreased NDV replication but surprisingly increased oncolysis while ISG12a silencing had the opposite effect on TRAIL-sensitive cells. Finally, RIG-I and Noxa appear to also contribute to NDV oncolysis. Together, these results suggest that high basal ISG12a may inhibit NDV replication and oncolysis, while low basal ISG12a may allow sufficient NDV replication for induction of ISG12a, and other factors required for NDV oncolysis, with implications for future therapeutics.