Gene therapy of many genetic diseases requires permanent gene transfer into self-renewing stem cells and restriction of transgene expression to specific progenies. Human immunodeficiency virus (HIV)-derived lentiviral vectors are very effective in transducing rare, nondividing stem cell populations (e.g., hematopoietic stem cells) without altering their long-term repopulation and differentiation capacities. We developed a strategy for transcriptional targeting of lentiviral vectors based on replacing the viral long terminal repeat (LTR) enhancer with cell lineage-specific, genomic control elements. An upstream enhancer (HS2) of the erythroid-specific GATA-1 gene was used to replace most of the U3 region of the LTR, immediately upstream of the HIV type 1 (HIV-1) promoter. The modified LTR was used to drive the expression of a reporter gene (the green fluorescent protein [GFP] gene), while a second gene (a truncated form of the p75 nerve growth factor receptor [DeltaLNGFR]) was placed under the control of an internal constitutive promoter to monitor cell transduction, or to immunoselect transduced cells, independently from the expression of the targeted promoter. The transcriptionally targeted vectors were used to transduce cell lines, human CD34+ hematopoietic stem-progenitor cells, and murine bone marrow (BM)-repopulating stem cells. Gene expression was analyzed in the stem cell progeny in vitro and in vivo after xenotransplantation into nonobese diabetic-SCID mice or BM transplantation in coisogenic mice. The modified LTR directed high levels of transgene expression specifically in mature erythroblasts, in a TAT-independent fashion and with no alteration in titer, infectivity, and genomic stability of the lentiviral vector. Expression from the modified LTR was higher, better restricted, and showed less position-effect variegation than that obtained by the same combination of enhancer-promoter elements placed in a conventional, internal position. Cloning of the woodchuck hepatitis virus posttranscriptional regulatory element at a defined position in the targeted vector allowed selective accumulation of the genomic transcripts with respect to the internal RNA transcript, with no loss of cell-type restriction. A critical advantage of this targeting strategy is the use of a spliced, major viral transcript to express a therapeutic gene and that of an internal, independently regulated promoter to express an additional gene for either cell marking or in vivo selection purposes.