The liver is an important target for potential gene therapy because of the critical role it plays in intermediary metabolism and synthesis of serum proteins. We report the use of retroviral vectors for transfer of recombinant genes into primary mouse hepatocytes. Hepatocytes were grown in a defined serum-free medium and expressed liver-specific functions for up to 14 days. Hepatocytes were transformed to Genticin (G418) resistance by infection with recombinant retroviruses carrying the Tn5 neomycin-resistance gene. The G418-resistant cells exhibited characteristic hepatocyte morphology and continued to express liver-specific gene function. A retrovirus that expresses neomycin resistance driven by a herpes simplex thymidine kinase promoter produced the most efficient transformation compared with viruses using the retroviral long terminal repeat promoter or the simian virus 40 early-region promoter. These experiments indicate that primary hepatocytes can be successfully cultured and transformed with recombinant genes using retroviral vectors. These results provide a model for future somatic gene replacement therapy in which functional genes can be introduced into hepatocytes by viral-mediated gene transfer.