Silencing and variegated transgene expression are poorly understood problems that can interfere with gene function studies in human embryonic stem cells (hESCs). We show that transgene expression (enhanced green fluorescent protein [EGFP]) from random integration sites in hESCs is affected by variegation and silencing, with only half of hESCs expressing the transgene, which is gradually lost after withdrawal of selection and differentiation. We tested the hypothesis that a transgene integrated into the adeno-associated virus type 2 (AAV2) target region on chromosome 19, known as the AAVS1 locus, would maintain transgene expression in hESCs. When we used AAV2 technology to target the AAVS1 locus, 4.16% of hESC clones achieved AAVS1-targeted integration. Targeted clones expressed Oct-4, stage-specific embryonic antigen-3 (SSEA3), and Tra-1-60 and differentiated into all three primary germ layers. EGFP expression from the AAVS1 locus showed significantly reduced variegated expression when in selection, with 90% +/- 4% of cells expressing EGFP compared with 57% +/- 32% for randomly integrated controls, and reduced tendency to undergo silencing, with 86% +/- 7% hESCs expressing EGFP 25 days after withdrawal of selection compared with 39% +/- 31% for randomly integrated clones. In addition, quantitative polymerase chain reaction analysis of hESCs also indicated significantly higher levels of EGFP mRNA in AAVS1-targeted clones as compared with randomly integrated clones. Transgene expression from the AAVS1 locus was shown to be stable during hESC differentiation, with more than 90% of cells expressing EGFP after 15 days of differentiation, as compared with approximately 30% for randomly integrated clones. These results demonstrate the utility of transgene integration at the AAVS1 locus in hESCs and its potential clinical application.