Direct retrovirus-mediated hepatic gene transfer results in permanent gene expression; however, gene transfer requires surgical hepatectomy (to stimulate cell division) and has been inefficient. We recently used recombinant adenovirus vectors that transiently expressed urokinase from mouse hepatocytes to induce hepatocellular regeneration in place of a partial hepatectomy. The adenovirus method allowed for five-fold more efficient retrovirus transduction in vivo compared to the conventional partial hepatectomy approach. The major problem with the urokinase-mediated hepatic regeneration was the transient secretion of urokinase into the bloodstream that led to hypocoagulation. To circumvent this side-effect, the urokinase protein was modified by adding amino-terminal and carboxy-terminal endoplasmic reticulum retention signals. The recombinant urokinase molecules expressed from adenoviral vectors remained in hepatocytes, were enzymatically active, and resulted in similar rates of hepatic regeneration as found with the secreted urokinase. Modified urokinase-mediated liver regeneration was equally capable of allowing retrovirus-mediated gene transfer in vivo. Thus, the method of direct retrovirus transduction of hepatocytes becomes clinically relevant as the technology becomes safer.