The major mechanism of tumor cell resistance to 1,3-bis(2-chloroethyl)-1-nitrosourea (BCNU) is the DNA repair protein O(6)-methylguanine DNA methyltransferase (MGMT). This repair system can be temporarily inhibited by the free base O(6)-benzylguanine (BG), which depletes cellular MGMT activity and sensitizes tumor cells and xenografts to BCNU. In clinical studies, the combination of BG and BCNU enhanced the myeloid toxicity of BCNU, thereby reducing the maximum tolerated dose. We have shown previously that retroviral expression of the P140K mutant of MGMT (MGMT-P140K) in murine and human hematopoietic cells produces significant resistance of bone marrow cells to low-dose, combination BG and BCNU treatment in vivo. In the current study, we investigated the ability of bone marrow transplantation with MGMT-P140K-transduced hematopoietic cells to protect against an intensive antitumor treatment regimen of combination BG and BCNU in non-obese diabetic/severe combined immunodeficient (NOD/SCID) mice. The donor marrow cells underwent in vivo BG and BCNU selection before transplantation, allowing infusion of a highly selected population of transduced cells. Tolerance to the intensive BG and BCNU treatment was markedly improved in secondary MGMT-P140K-transplanted mice (n = 19) compared to untransplanted mice (n = 15), as indicated by blood counts and survival rate. The dose-intensified BG and BCNU therapy produced significant growth delays of glioma xenografts in MGMT-P140K-transplanted mice, extending the tumor doubling time by >40 days. These results demonstrate that MGMT-P140K-transduced bone marrow protects against BG and BCNU combination therapy in vivo and allows dose-intensified treatment of tumor xenografts.