Liver cancer is the fifth most common cancer in the world, with China bearing a disproportionate burden of cases. Typically diagnosed at advanced stages, liver cancer often utilizes surgical treatments such as resection, transcatheter hepatic artery chemoembolization (TACE), and radiofrequency ablation. However, advancements in genetic engineering and tumor immunology have unveiled the distinct potential of targeted oncolytic virus therapy. Oncolytic virus, in particular, can selectively destroy tumor cells without harming normal cells, offering a promising avenue for liver cancer treatment through immune system activation, tumor microenvironment modulation, and other mechanisms. This review describes the mechanism of action of oncolytic viruses, the new development of several common oncolytic viruses, and the combination with traditional therapies, aiming to provide directions for the subsequent therapeutic research on hepatocellular carcinoma (HCC).