Dendritic cells are attractive candidates for vaccine-based immunotherapy because of their potential to function as natural adjuvants for poorly immunogenic proteins derived from tumors or microbes. In this study, we evaluated the feasibility and consequences of introducing foreign genetic material by retroviral vectors into dendritic cell progenitors. Proliferating human bone marrow and cord blood CD34+ cells were infected by retroviral vectors encoding the murine CD2 surface antigen. Mean transduction efficiency in dendritic cells was 11.5% from bone marrow and 21.2% from cord blood progenitors. Transduced or untransduced dendritic cell progeny expressed comparable levels of HLA-DR, CD83, CD1a, CD80, CD86, S100, and p55 antigens. Granulocytes, macrophages, and dendritic cells were equally represented among the transduced and mock-transduced cells, thus showing no apparent alteration in the differentiation of transduced CD34+ precursors. The T-cell stimulatory capacity of retrovirally modified and purified mCD2-positive allogeneic or nominal antigen-pulsed autologous dendritic cells was comparable with that of untransduced dendritic cells. Human CD34+ dendritic cell progenitors can therefore be efficiently transduced using retroviral vectors and can differentiate into potent immunostimulatory dendritic cells without compromising their T-cell stimulatory capacity or the expression of critical costimulatory molecules and phenotypic markers. These results support ongoing efforts to develop genetically modified dendritic cells for immunotherapy.