Oncolytic virus (OV) therapy is an anti-cancer approach that uses viruses that preferentially infect, replicate in and kill cancer cells. Vesicular stomatitis virus (VSV, a rhabdovirus) is an OV that is currently being tested in the USA in several phase I clinical trials against different malignancies. Several factors make VSV a promising OV: lack of pre-existing human immunity against VSV, a small and easy to manipulate genome, cytoplasmic replication without risk of host cell transformation, independence of cell cycle and rapid growth to high titres in a broad range of cell lines facilitating large-scale virus production. While significant advances have been made in VSV-based OV therapy, room for improvement remains. Here we review recent studies (published in the last 5 years) that address ‘old’ and ‘new’ challenges of VSV-based OV therapy. These studies focused on improving VSV safety, oncoselectivity and oncotoxicity; breaking resistance of some cancers to VSV; preventing premature clearance of VSV; and stimulating tumour-specific immunity. Many of these approaches were based on combining VSV with other therapeutics. This review also discusses another rhabdovirus closely related to VSV, Maraba virus, which is currently being tested in Canada in phase I/II clinical trials.