We have characterized the recombinant replication-competent retrovirus (RCV) arising from p delta N2-derived vectors in the packaging cell lines psi 2 (ecotropic) and PA317 (amphotropic). Detailed restriction patterns and sequence of the envelope region of these RCVs has indicated that they arose from recombination events between the virus plasmids used to create the packaging cell line and the vectors. There was no evidence of recombination involving endogenous murine retroviral sequences in the packaging cell line or in transduced hematopoietic cells. In addition, we have confirmed that the mutation of the start codon of the pXM5(N2) derivatives gag+ sequence drastically decreased the occurrence of RCV production. These results offer encouragement that the risk of RCV production can be adequately decreased in gene therapy applications of defective retrovirus vectors.