The reconstitutive potential of CD34+-derived cord blood (CB) cells, transduced with a regulated diphtheria toxin A (DT-A) chain gene, was examined in SCID-hu mice harboring a conjoint organ composed of human thymus and liver (thy/liv). The DT-A-transduced cells, injected directly into the thy/liv organ, showed the same engraftment potential as control CB cells transduced with the non-DT-A parental vector. CB cells, distinguishable from the thy/liv cells by the HLA marker B7, were preferentially maintained in ex vivo culture. In the thy/liv organ, the engrafted CB cells represented >80% of the total cells. A majority of cells (>70%) in the thy/liv organ were also CD4+CD8+, as would be expected of maturing thymocytes. The incidence of double-positive cells was highest at 44 days (compared with 30 days and 80 days) after injection of CB cells. This suggested that a minimum time was required to achieve optimal proliferation of cells in the thy/liv organ but that, at later times, all of the early cells had matured. Thus, the population used for engraftment contained early cells but not self-renewing cells. The double-positive cells matured rapidly into single-positive cells (either CD4+ or CD8+) when placed in ex vivo culture. Marked cells (neo+) could readily be detected in the thy/liv-derived cells. The cells transduced with DT-A showed longterm protection in ex vivo culture against HIV T lymphotropic isolate NL4-3. This study shows that DT-A-transduced cells had no apparent disadvantage in engraftment of the thy/liv organ and did not have any toxic effects in vivo. Such cells were protected against HIV infection evert when challenged more than 2 months after transduction and after a 44-day engraftment period in the thy/liv mice. These data support the feasibility of toxin gene therapy as a strategy for HIV infection.