This study tested the transduction efficiency of human bone marrow stromal cells (hBMSCs) with vesicular stomatitis virus (VSV)-pseudotyped retrovectors and their subsequent osteogenic differentiation in vitro. Two different retrovectors encoding beta-galactosidase (beta-gal) or enhanced green fluorescent protein (eGFP) as marker genes were examined for transduction of hBMSCs. hBMSCs were obtained from bone marrow filtrates of normal donors (aged 5-35 years), cultured in alpha-minimal essential medium (alpha-MEM) containing 10% fetal calf serum and infected with retrovectors soon after the adherent cells started to form individual colonies. Transduced hBMSCs were observed to express eGFP protein 4-7 days after infection in primary cultures, and the majority of hBMSCs were eGFP-positive. hBMSCs were also stained for beta-gal in the secondary cultures and virtually all hBMSCs expressed beta-gal activity. Transduced hBMSCs were examined for their osteogenic potential. These cells were found to express markers of osteogenic differentiation, including alkaline phosphatase, type I collagen, bone sialoprotein, decorin, and osteocalcin, as strongly as uninfected control cells. Mineralization was also induced by dexamethasone in transduced cells as well as control cells. These results demonstrate that hBMSCs are highly susceptible to infection with VSV-pseudotyped retrovectors with the majority of cultured cells expressing the viral transgenes without antibiotic selection. Transduced cells retain their osteogenic potential in vitro. hBMSCs are a promising cellular vehicle for systemic human gene therapy and VSV-pseudotyped retrovectors should be effective for their in vitro transduction prior to cellular engraftment.