We have been developing both local and systemic gene therapy approaches to treat inflammatory and autoimmune diseases. To determine if systemic, constitutive expression of biologically active anti-inflammatory agents is therapeutic and/or has associated toxicity, mouse hematopoietic stem cells were infected with retroviral vectors carrying the genes for human IL-1 receptor antagonist (IL-1Ra), human soluble TNF receptor p75 (sTNFR), or the beta-galactosidase (lacZ) gene, and transplanted into lethally irradiated recipients. The serum levels of human IL-1Ra and human sTNFR in the long-term reconstituted mice, 2-7 months after transplantation, were 596 and 158 ng/ml respectively. The long-term expression of human IL-1Ra had minimal effects on the PBMC profile whereas human sTNFR expression increased the percentage of B220 and Mac.1 stained cells and decreased slightly the specific T cell subsets. The ability of these proteins to protect the transplanted mice from endotoxin treatment was determined by measuring serum interleukin-6 (IL-6) and interleukin-10 (IL-10) responses after LPS injection at 1.5, 3, 4.5 and 24 h after treatment. The IL-1Ra group showed diminished IL-10 levels and less mortality after injection of LPS. These results demonstrate that constitutive, systemic expression of IL-1Ra and sTNFR is able to confer partial protective effects following treatment with endotoxin. These results further demonstrate that gene transfer methods which result in systemic, long-term expression of immunodulatory proteins could be applied to the treatment of inflammatory diseases.