Moloney murine leukemia virus-based vector expressing Escherichia coli betaw-galactosidase (IacZ) as reporter gene and the transposon Tn5 neomycin resistance (neo) gene was transduced at low-multiplicity of infections into NIH 3T3 cells. Geneticin (G418)-resistant cells were recloned and cell lines containing beta-galactosidase positive or beta-galactosidase negative cells were obtained. Both positive and negative cell lines contained a single proviral copy at distinct integration sites. RNA complementary to IacZ was detected in p-galactosidase positive as well as in one of three investigated beta-galactosidase negative cell lines. DNA sequence analysis of proviral LacZ gene in beta-galactosiclase negative cell line C6 showed a single nucleoticle insertion at position 1567 resulting in reading frame shift and translational stop codon at position 1629. This mutation explains the enzyme inactivation. The absence of beta-galactosiclase after retroviral transduction of LacZ reproter gene may be a consequence of definite mutation but not a consequence of ineffective transduction or transcriptional inactivation of transgene. (C) 2003 Wiley Periodicals, Inc.