Methods for the efficient transduction and expansion of fetal hematopoietic stem cells could lead to novel in utero therapies for blood cell disorders and enzymatic deficiencies. Here we describe a new assay to measure rapidly the effects of cytokines on the differentiation or expansion of primitive progenitors and stem cells found among CD38(-)CD34(++) lineage() cells isolated from human midgestation liver. Importantly, conditions that otherwise supported the expansion of clonogenic progenitors reduced their proliferative capacity. A combination of megakaryocyte growth and development factor and granulocyte-macrophage colony-stimulating factor maintained proliferative potential while also yielding an intermediate level of progenitor expansion. Retroviral transduction was achieved using Moloney murine leukemia virus-based vectors. Freshly isolated candidate stem cells could be transduced at almost 17% efficiency by a 1-h exposure to virus with centrifugation to aid transduction. This was increased to a mean 35.5% transduction efficiency after 1 day of culture. Additionally, the transduction efficiency of candidate stem cells isolated from fetal placental blood was 33.0%. These findings encourage further investigation into the feasibility of ex utero gene therapy whereby fetal cells are isolated from the circulation, transduced, and expanded ex utero before being returned to the fetus.