ABSTRACT: Newcastle disease virus (NDV) is an oncolytic virus being developed for the treatment of cancer. Following infection of a human ovarian cancer cell line (OVCAR3) with a recombinant low-pathogenic NDV, persistent infection was established in a subset of tumor cells. Persistently infected (PI) cells exhibited resistance to superinfection with NDV and established an antiviral state, as demonstrated by upregulation of interferon and interferon-induced genes such as myxoma resistance gene 1 (Mx1) and retinoic acid-inducing gene-I (RIG-I). Viruses released from PI cells induced higher cell-to-cell fusion than the parental virus following infection in two tumor cell lines tested, HT1080 and HeLa, and remained attenuated in chickens. Two mutations, one in the fusion (F) protein cleavage site, F117S (F117S), and another in hemagglutinin-neuraminidase (HN), G169R (HN169R), located in the second sialic acid binding region, were responsible for the hyperfusogenic phenotype. F117S improves F protein cleavage efficiency, facilitating cell-to-cell fusion, while HN169R possesses a multifaceted role in contributing to higher fusion, reduced receptor binding, and lower neuraminidase activity, which together result in increased fusion and reduced viral replication. Thus, establishment of persistent infection in vitro involves viral genetic changes that facilitate efficient viral spread from cell to cell as a potential mechanism to escape host antiviral responses. The results of our study also demonstrate a critical role in the viral life cycle for the second receptor binding region of the HN protein, which is conserved in several paramyxoviruses.IMPORTANCE Oncolytic Newcastle disease virus (NDV) could establish persistent infection in a tumor cell line, resulting in a steady antiviral state reflected by constitutively expressed interferon. Viruses isolated from persistently infected cells are highly fusogenic, and this phenotype has been mapped to two mutations, one each in the fusion (F) and hemagglutinin-neuraminidase (HN) proteins. The F117S mutation in the F protein cleavage site improved F protein cleavage efficiency while the HN169R mutation located at the second receptor binding site of the HN protein contributed to a complex phenotype consisting of a modest increase in fusion and cell killing, lower neuraminidase activity, and reduced viral growth. This study highlights the intricate nature of these two mutations in the glycoproteins of NDV in the establishment of persistent infection. The data also shed light on the critical balance between the F and HN proteins required for efficient NDV infection and their role in avian pathogenicity.