Gene therapy of human T-lymphocyte disorders, including acquired immunodeficiency syndrome (AIDS), would be greatly facilitated by the development of an in vivo system in which transduced human hematopoietic stem cells can be used to reconstitute the T-lymphoid compartment. Here we use the SCID-hu mouse as a recipient for human CD34+ hematopoietic progenitor cells transduced in vitro with a retroviral vector carrying the neomycin resistance gene (neoR). The transduced cells engraft and reconstitute the lymphoid compartments of the human thymus implant with as few as 5 x 10(4) CD34+ cells. The neoR gene was expressed at low levels in human thymocytes and there was no apparent effect on thymocyte differentiation as a result of vector transduction. Thus, this SCID-hu mouse system is the first in vivo model showing human thymopoiesis after transduction of exogenous vectors, and should allow preclinical testing of gene therapeutic reagents designed to function in human cells of the T-lymphoid lineage. Because human immunodeficiency virus type 1 infection induces depletion of human thymocytes in SCID-hu mice, this system may be particularly valuable in evaluating efficacy of gene therapies to combat AIDS.