Paroxysmal nocturnal hemoglobinuria (PNH) is an acquired hematopoietic disorder characterized by complement-mediated hemolytic anemia, pancytopenia, and venous thrombosis. These clinical manifestations arise from an underlying molecular defect of bone marrow stem cells. Specifically, somatic mutations in the phosphatidylinositol glycan class A gene result in the ability of blood cells to anchor complement- regulatory proteins (CD59 and DAF) to the cell surface via glycosyl phosphatidylinositol (GPI). In an attempt to circumvent the functional defect in PNH cells, a recombinant transmembrane form of CD59 (CD59-TM) was analyzed for the ability to regulate complement activity. Balb/3T3 stable transfectants expressing similar levels of either CD59-TM or native CD59 (CD59-GPI) were equally protected against human complement- mediated membrane damage. Treatment of these cells with phosphatidylinositol-specific phospholipase C failed to release CD59-TM from the cell surface. Retroviral transduction of GPI-anchoring deficient mouse L cells with CD59-TM resulted in surface expression of the protein and rendered these cells resistant to human complement- mediated membrane damage. Conversely, L cells transduced with CD59-GPI failed to express this protein on the cell surface. A GPI-anchoring deficient complement-sensitive B-cell line derived from a PNH patient was successfully transduced with CD59-TM, resulting in surface expression of the protein. The PNH B cells expressing CD59-TM were protected against classical complement-mediated membrane damage by human serum. Taken together, these data establish that a functional recombinant transmembrane form of CD59 can be expressed on the surface of GPI-anchoring deficient PNH cells and suggest that retroviral gene therapy with this molecule could provide a treatment for PNH patients.