There are several limitations to current methods for the detection of target genes following gene transfer. We report a novel PCR in situ procedure which overcomes many of these and permits the direct quantification of gene transfer in individual cells. PCR amplification of a proviral specific nucleotide sequence in target cells was followed by in situ hybridization using fluorescent probes complementary to different regions of the amplicon. Many of the problems previously encountered using in situ PCR, particularly the generation of false positive results and extracellular leakage of PCR products, were overcome by modifications of existing protocols. Positive cells were readily identified by fluorescence microscopy and a high sensitivity, specificity and correlation coefficient were demonstrated in mixing experiments using varying proportions of known provirus positive and negative cells. The method was applied successfully to identify low numbers of gene-modified hematopoietic cells in clinical specimens in a trial of retrovirus-mediated gene transfer into blood forming stem cells. This approach is simple and reliable, has the potential for use in a variety of gene therapy applications and may become the method of choice for the assessment of gene transfer efficacy.