Gene therapy application to pulmonary airways and alveolar spaces holds tremendous promise for the treatment of lung diseases. However, safe and effective long-term gene expression using viral and nonviral vectors has not yet been achieved. Adenoviral vectors, with a natural affinity for airway epithelia, have been partially effective, but are inflammatory and induce only transient gene expression. We investigate the novel approach of using retrovirally transduced multipotent bone marrow-derived stem cells (BMSC) to deliver gene therapy to lung epithelium. We have shown previously that up to 20% of lung epithelial cells can be derived from marrow following BMSC transplantation. Here, irradiated female mice were transplanted with male marrow that had been transduced with retrovirus encoding eGFP. Transgene expressing lung epithelial cells were present in all recipients analyzed at 2, 5, or 11 mo after transplant (n = 10), demonstrating that highly plastic BMSC can be stably transduced in vitro and retain their ability to differentiate into lung epithelium while maintaining long-term transgene expression.