Adeno-associated virus (AAV) is a single stranded DNA virus with broad host range that commonly infects humans but produces no disease. Replication of AAV requires co-infection with a complimenting virus, usually adenovirus. Recombinant AAV preparations have been obtained using a recombinant plasmid containing the terminal inverted repeat structures of AAV flanking a specific transcriptional unit. Co- transvection of tissue culture cells with this plasmid and a second helper plasmid containing the structural genes for AAV protein after infection with wild-type adenovirus results in the release of recombinant AAV without wild-type virus production. We have used this system to construct recombinant AAV containing a human gamma-globin gene linked to transcriptional regulatory elements derived from the locus control region (LCR) of the beta-globin gene cluster. Infection of a human erythroleukemia cell line results in integration of the recombinant genome in low copy number into a host cell chromosome. High level, regulated expression of the transferred globin gene was observed. Mutagenesis of the LCR element confirmed that binding of an erythroid- specific protein, NF-E2, to the enhancer is required for inducible globin gene expression. To investigate the ability of recombinant AAV to transfer genes into primitive hematopoietic cells, we used a vector containing the gene for beta-galactosidase, an enzyme whose activity can be readily demonstrated by a cytochemical stain. Primitive human hematopoietic cells were enriched by positive immunoselection using antibodies specific for the CD34 antigen. We found a high efficiency of gene transfer into these cells using the recombinant AAV containing the beta-galactosidase gene. Thus, the recombinant AAV vector system appears to hold promise for transfer of genes into hematopoietic stem cells with subsequent regulated expression in differentiated progeny.