Insertional mutagenesis from virus infection is an important pathogenic risk for the development of cancer. Despite the advent of high-throughput sequencing, discovery of viral integration sites and expressed viral fusion events are still limited. Here, we present ViralFusionSeq (VFS), which combines soft-clipping information, read-pair analysis and targeted de novo assembly to discover and annotate viral-human fusions. VFS was used in an RNA-Seq experiment, simulated DNA-Seq experiment and re-analysis of published DNA-Seq datasets. Our experiments demonstrated that VFS is both sensitive and highly accurate.