Retroviral vectors containing the selectable bacterial gene for G418 resistance (neo) were used to demonstrate gene transfer into primary human bone-marrow progenitor cells. To obtain populations of cells in which a high proportion of cells were expressing the neo gene, several important modifications were made to earlier procedures. Cells from normal donors were infected in vitro, were exposed to high concentrations of G418 for two days in liquid culture to enrich for cells expressing the neo gene, and were plated in semisolid medium. Gene transfer and expression were detected in colonies arising from progenitors of granulocyte-macrophage and erythroid lineages. Survival curves indicated that a high proportion of progenitor cells, approaching 100%, were G418 resistant. Furthermore, addition of growth factors contained in 5637-conditioned medium to the bone marrow improved the recovery of G418-resistant progenitors twofold to threefold. In addition to these biological measurements of gene expression in progenitor cells, significant levels of neo-specific RNA, similar to the levels of RNA expression in the virus-producing fibroblast cell line, were detected in the bone marrow cells after preselection. These results demonstrate that retrovirus vectors can be used successfully to transfer genes at high efficiency into progenitor cells in the human blood-forming system.