We constructed a functional MoMuLV-based bicistronic retroviral vector encoding the herpes simplex virus type I thymidine kinase gene, which induces sensitivity to the prodrug ganciclovir (gcv), and the reporter beta-galactosidase gene (MFG-tk-IRES-lacZ). The U937 histiocytic cell line was transduced with this vector, and a clone (VB71) with high-level transgene expression was selected. Severe combined immunodeficient (SCID) mice were injected with VB71 cells to evaluate the role of long terminal repeat methylation in transgene silencing in vivo and to see whether 5-azacytidine (5' aza-C) demethylating agent prevented it. We found 5' aza-C maintained gene expression at high level in vitro. In vivo, time to tumor onset was significantly longer in SCID mice receiving the VB71 cells, 5' aza-C, and gcv compared with animals treated with either 5' aza-C or gcv alone. The number of injected tumor cells influences tumor onset time and the efficacy of 5' aza-C and gcv treatment. The standard gcv treatment schedule (10 mg/kg from d + 1 until the onset of tumor) controlled tumor onset better than short-term treatment with high doses. In conclusion, the results extend our previous findings that transgene methylation in vivo may be prevented with an appropriate schedule of 5' aza-C and gcv.