Transplantation of BM stromal cells engineered to secrete therapeutic factors could represent a treatment for a large array of hematologic disorders. The aim of this study was to evaluate the susceptibility of human BM stromal cell precursors to retroviral gene transfer, then the ability of those to be transplanted in vivo. We have transduced a recombinant retrovirus encoding the mouse CD2 antigen into STRO-1+ cells selected from adult and fetal BM. Gene-modified stromal cells were injected intravenously into NOD-SCID mice engrafted previously with pieces of human fetal hematopoietic bone. Using nested PCR, transgenic human cells were detected both in the marrow of human bone grafts and in the BM, liver, and spleen of host mice 7 weeks after grafting. These data indicate that BM stromal progenitor cells are targets for retrovirus-mediated gene transfer and can home to hematopoietic tissues on engraftment through the bloodstream of nonconditioned hosts.