Human mesenchymal stem cells (hMSC)-nonhematopoietic cells within the bone marrow microenvironment that can be culture expanded to a uniform population of fibroblastic cells-have been shown to support long-term hematopoiesis of CD34+ cells. Because direct contact between stromal elements and CD34+ cells enhances long-term engraftment, we postulated that hMSC would be a good alternative to the more heterogeneous stroma currently used in gene transfer studies. We used hMSC to support retroviral gene transfer of the G156A MGMT (deltaMGMT) gene encoding an alkyltransferase (AGT), which confers drug resistance to a combination of O6-benzylguanine (BG) plus the alkylating agents BCNU and temozolomide (TMZ) in human hematopoietic progenitors. In the presence of IL-3, IL-6, SCF, or leukemia inhibitory factor (LIF) and Flt-3 ligand, hMSC facilitated expansion and retroviral transduction of human peripheral blood-mobilized CD34+ cells. Furthermore, the transduced cells expressed AGT in 29% of hematopoietic cells and were 5-fold more resistant to BCNU and TMZ than were untransduced cells. Unirradiated hMSC present as support cells were simultaneously transduced and expressed AGT in 26% of the cells. Thus, the homogeneous nature of hMSC, and their ability to support gene transfer and be transduced themselves suggest they may be useful in clinical gene transfer protocols and have broad therapeutic applications.