Intimal hyperplasia (IH) is the primary cause of vein bypass graft failure. The smooth muscle cell (SMC) is a key element of IH as it phenotypically switches from a contractile to a synthetic state which can become pathological. R7020, which is an engineered strain of Herpes Simplex Virus-1, inhibits IH in animal models. Although it has many characteristics which make it a strong candidate for use as a prophylactic agent how it inhibits IH is not well understood. The objective of this study was to identify modes of action used by R7020 to function in blood vessels that may also contribute to its inhibition of IH. The cytopathic effect of R7020 on SMCs was determined in vitro and in a rabbit IH model. In vitro assays with R7020 infected SMCs were used to quantify the effect of dose on the release kinetics of the virus as well as the effects of R7020 on cell viability and the adhesion of peripheral blood mononuclear cells (PBMCs) to SMCs in the absence and presence of tumor necrosis factor alpha (TNF-α). The observed cytopathic effect, which included R7020 positive filopodia that extend from cell to cell and the formation of syncytia, suggests that R7020 remains cell associated after egress and spreads cell to cell instead of by diffusion through the extracellular fluid. This would allow the virus to rapidly infect vascular cells while evading the immune system. The directionality of the filopodia in vivo suggests that the virus preferentially travels from the media towards the intima targeting SMCs that would lead to IH. The formation of syncytia would inhibit SMC proliferation as incorporated cells are not able to multiply. It was also observed that R7020 induced the fusion of PBMCs with syncytia suggesting the virus may limit the effect of macrophages on IH. Furthermore, R7020 inhibited the proliferative effect of TNF-α, an inflammatory cytokine associated with increased IH. Thus, the results of this study suggest that R7020 inhibits IH through multiple mechanisms.