Replicating virus vectors are attractive tools for anticancer gene therapy, but the potential for adverse events due to uncontrolled spread of the vectors has been a major concern. To design a tumor-specific retroviral replicating vector (RRV), we replaced the U3 region of the RRV ACE-GFP with a regulatory sequence consisting of the hepatitis B virus enhancer II (EII) and human α-fetoprotein (AFP) core promoter to produce ACE-GFP-EIIAFP, a hepatocellular carcinoma (HCC)-targeting RRV. Similar to ACE-GFP, ACE-GFP-EIIAFP exhibited robust green fluorescent protein (GFP) expression in HCC cells and, most importantly, it exhibited HCC-specific replication and did not replicate in non-HCC tumor cells or normal liver cells. We sequenced the promoter region of ACE-GFP-EIIAFP collected from serial infection cycles to examine the genomic stability of the vector during its replicative spread, and found that the vector could retain the hybrid promoter in the genome for at least six infection cycles. In vitro studies revealed that ACE-CD-EIIAFP and ACE-PNP-EIIAFP, which express the yeast cytosine deaminase and Escherichia coli purine nucleoside phosphorylase, respectively, exert a highly potent cytotoxic effect on HCC cells in the presence of their respective prodrugs. In vivo, ACE-CD-EIIAFP-mediated suicide gene therapy efficiently suppressed HCC tumor growth and no detectable RRV signal was observed in extratumoral tissues. These results suggest that the tumor-specific, suicide-gene-encoding RRV may fulfill the promise of retroviral gene therapy for cancer.