To modulate alloreactivity after hematopoietic stem cell (HSC) transplantation, suicide gene-expressing donor T cells can be administered with an allogeneic T cell-depleted HSC graft. Immune competence of such cells is a critical issue. We have examined the impact of our ex vivo gene transfer protocol (12-day culture period including CD3/IL-2 activation, retrovirus-mediated gene transfer, and G418-based selection) on the phenotype and functional properties of gene-modified cells (GMC). GMC were compared with control cells that had been cultured in parallel with GMC, but nontransduced and nonselected, as well as with peripheral blood mononuclear cells (PBMC). Our data show that phenotypical modifications are similar in control cells and GMC, demonstrating that alterations result from the 12-day culture rather than from the transduction and/or selection process itself. Such modifications include a reversal of CD4/CD8 ratio, activated phenotype (increased expression of CD45RO, CD95, and HLA-DR), and acquisition or increased expression of co-stimulatory molecules (CD80, CD86, and CD40). This led to an enhanced allostimulating potential of GMC, as compared with resting T cells, when used as stimulating cells in mixed lymphocyte reactions. Conversely, when using them as responder cells in mixed lymphocyte reactions, GMC exhibited a rapid loss of alloreactivity that resulted both from culture-dependent and from transduction and/or selection-dependent events. In conclusion, the retrovirus-mediated gene transfer can be associated with major phenotypical and functional alterations that could have strong clinical implications (increased immunogenicity, reduced anti-leukemic effect). Thus, future T cell expansion protocols should try to improve not only cell expansion or gene transfer efficiency, but also T cell functions.