We investigated whether directly injecting retroviral vectors into preimmune fetuses could result in the transfer and long-term expression of exogenous genes. Twenty-nine preimmune sheep fetuses were injected with helper-free retroviral vector preparations. Twenty-two fetuses survived to term, 4 of which were sacrificed at birth. Of the remaining 18 animals, 3 were controls and 15 had received vector preparations. Twelve of these 15 animals demonstrated transduction of hematopoietic cells when blood and marrow were analyzed by neo(r)-specific PCR. Eight experimental sheep have been followed for 5 years, during which time we have consistently observed proviral DNA and G418-resistant hematopoetic progenitors. The G418-resistant colonies were positive when analyzed by neo(r)-specific PCR. neo(r) gene expression was also demonstrated using several immunological and biochemical methods. The transduction of hematopoietic stem cells was confirmed when lambs transplanted with bone marrow from in utero-transduced sheep exhibited neo(r) activity in marrow and blood. Vector distribution was widespread in primary animals without pathology. PCR analysis indicates that the germ line was not altered. These studies demonstrate that direct injection of an engineered retrovirus is a feasible means of safely delivering a foreign gene to a developing fetus and achieving long-term expression without modifying the germ line of the recipient.