A rational approach to the development of gene therapies for cystic fibrosis requires a better understanding of the cellular targets for gene transfer in the airway epithelium. We have used recombinant retroviruses to study the dynamics and lineage relationships of a regenerating rat tracheal epithelium. Primary cultures of tracheal epithelial cells were exposed to lacZ-transducing retroviruses and subsequently seeded into denuded trachea that were implanted into BALB/c (nu/nu) mice. The grafts developed a fully differentiated mucociliary epithelium containing large clones of lacZ-expressing cells with virtually all cell types represented within each clone. These data are most consistent with gene transfer into a putative progenitor cell that is capable of extensive self renewal and pleuripotent development. Vector-specific variation in transgene expression was noted in the various cell types.