We applied a coculture system for the genetic manipulation of human B-lymphoid and myeloid progenitor cells using murine bone marrow stromal cell support, and investigated the effects of forced Pax5 expression in both cell types. Cytokine-stimulated cord blood CD34+ cells could be transduced at 85% efficiency and 95% cell viability by a single 24-h infection with RD114-pseudotyped retroviral vectors, produced by the packaging cell line Plat-F and bicistronic vector plasmids pMXs-Ig, pMYs-Ig, or pMCs-Ig, encoding EGFP. Infected CD34+ cells were seeded onto HESS-5 cells in the presence of stem cell factor and granulocyte colony-stimulating factor, allowing the extensive production of B progenitors and granulocytic cells. We examined the cell number and CD34, CD33, CD19, and CD20 lambda and kappa expressions by flow cytometry. Ectopic expression of Pax5 in CD34+ cells resulted in small myeloid progenitors coexpressing CD33 and CD19 and inhibited myeloid differentiation. After 6 weeks, the number of Pax5-transduced CD19+ cells was 40-fold lower than that of control cells. However, the expression of CD20 and the kappa/lambda chain on Pax5-transduced CD19+ cells suggests that the Pax5 transgene may not interfere with their differentiation. This report is the first to describe the effects of forced Pax5 expression in human hematopoietic progenitors.