Cells transduced ex vivo with transgenes encoded on retroviruses have constant and prolonged expression in vitro; however, in vivo expression is quickly lost. Much attention has been directed at methods to circumvent this problem. We have shown that loss of transgene expression does not occur when transduced immortalized 3T3 cells are transplanted to the in vivo setting of athymic mice. Ease of acquisition and potential for clinical application led us to assess the potential of using immortalized human keratinocytes for expression of transgenes in vivo. Human keratinocytes were immortalized with a HPV16-E6/E7 retrovirus, transduced with a lacZ retrovirus, cloned by limiting dilution, seeded onto a physiologic dermal substrate, and transplanted to athymic mice. Six weeks after transplantation, the immortalized transgene expressing keratinocytes had formed an epidermis that was indistinguishable from one formed by nonimmortalized keratinocytes; furthermore, there was no loss of expression of the lacZ gene. These observations show that methods to extend cell survival are an alternative approach to achieving stable and prolonged expression of transgenes in vivo and that HPV16-E6/ E7 immortalized keratinocytes generate an epidermis with normal morphology.