We describe here the transduction of murine hematopoietic progenitor cells with the dominant selectable neomycin drug-resistance (Neo) gene using a recombinant adeno-associated virus (AAV) vector. Successful transformation of progenitor cells to drug resistance was determined to be approximately 1.5% by colony formation in the presence of geneticin sulfate (G-418). The value of AAV as an alternative to the retrovirus vector systems is discussed.