Interleukin (IL)-21 is a novel cytokine in clinical development for the treatment of cancer. In this study, we have compared the efficacy of subcutaneous and intratumoral (IT) administration of IL-21 protein in two syngeneic mouse tumor models, RenCa renal cell carcinoma and B16 melanoma, and investigated the mechanisms by which IL-21 enhances CD8 T-cell-mediated antitumor immunity. We found that in comparison to subcutaneous administration, IT administration of IL-21 more potently inhibited tumor growth and increased survival. This correlated with increased densities of tumor-infiltrating CD8 and CD4CD25 T cells, but not CD4CD25FoxP3 T cells. Furthermore, IT administration of IL-21 increased degranulation, and expression of interferon-gamma and granzyme B in tumor-infiltrating CD8 T cells. Tumors injected with IL-21 grew slower than contralateral tumors, suggesting that the increased efficacy of IT administration of IL-21 was due to a local rather than systemic effect. IT administration of IL-21 led to enlarged tumor-draining lymph nodes (LNs), with increased naive lymphocyte numbers and proliferation of activated lymphocytes, suggesting that local administration of IL-21 generally benefits the tumor microenvironment and activates tumor-draining LNs. Overall, our data suggest that IL-21 augments CD8 T-cell-mediated antitumor immunity through increased proliferation and effector function and acts both on tumor-infiltrating CD8 T cells as well as on the draining LNs. IT administration led to superior CD8 T-cell proliferation, effector function, and antitumor efficacy, suggesting that IT administration of IL-21 may be clinically useful in patients with unresectable tumors.