Highly purified CD34++CD38-Lin- hematopoietic progenitors isolated from human fetal liver were infected with the murine retroviral vector, MFG nls-LacZ, which encodes a modified version of the Escherichia coli beta-galactosidase gene. Progenitors that were cocultured with the packaging cell line could reconstitute human bone marrow or thymus implanted in SCID-hu mice. Expression of the beta-galactosidase gene was observed in primitive and committed clonogenic progenitors, mature myeloid, B-lineage cells, and T-lineage cells for up to 4 months after injection into SCID-hu mice. Furthermore, hematopoietic reconstitution by genetically modified progenitor cells could be achieved by the injection of the cells generated from as few as 500 CD34++CD38-Lin- cells, suggesting efficient retroviral gene transfer into fetal liver progenitors.