A recombinant beta-galactosidase gene has been expressed in a specific arterial segment in vivo by direct infection with a murine amphotropic retroviral vector or by DNA transfection with the use of liposomes. Several cell types in the vessel wall were transduced, including endothelial and vascular smooth muscle cells. After retroviral infection, a recombinant reporter gene was expressed for at least 5 months, and no helper virus was detected. Recombinant gene expression achieved by direct retroviral infection or liposome-mediated DNA transfection was limited to the site of infection and was absent from liver, lung, kidney, and spleen. These results demonstrate that site-specific gene expression can be achieved by direct gene transfer in vivo and could be applied to the treatment of such human diseases as atherosclerosis or cancer.