Gene therapy is the introduction of genetic material into somatic cells in order to correct a genetic defect or provide a new therapeutic function. Among the numerous potential cellular targets for gene therapy, hematopoietic stem cells (HSC) may be viewed as one of the best candidates for such genetic modification. More than 250 clinical gene transfer protocols have been reported from around the world, and almost one in three involves manipulation of hematopoietic cells. The introduction of a new gene into the DNA of HSC and expression of the gene product in their progeny are exciting approaches to treatment of congenital and acquired diseases. Although it has been shown that hematopoietic progenitor cells, or even LTC-IC, can be easily transduced with high efficiency by retroviral vectors in vitro, and that long-term expression and high transduction can be obtained in mice after transplantation of the gene manipulated cells, this has not been observed in primate models or in human clinical trials. The reason for this discrepancy is not properly known. The major problems of gene therapy for cancer have been transduction rate, selectivity, and effectiveness due to the heterogeneity of genetic alterations found in human tumors. Overcoming these limitations in gene therapy requires not only improvement in cell biology and immunology, but also development of better delivery systems. Nevertheless, gene therapy is still promising and offers encouragement for future applications in clinical practice.