We have generated immunodeficient scid-/scid- (SCID)-transgenic mice expressing the genes for human interleukin 3, granulocyte/macrophage- colony stimulating factor, and stem cell factor. We have compared engraftment and differentiation of human hematopoietic cells in transgenic SCID mice with two strains of nontransgenic SCID mice. Human bone marrow cells carrying the CD34 antigen or human umbilical cord blood were injected into sublethally irradiated recipients. Human DNA was detected by polymerase chain reaction in peripheral blood and bone marrow of 14 of 28 transgenic SCID mice after transplantation, but in only 2 of 15 nontransgenic SCID littermates at a 10-fold lower level. Bone marrow cultures 8 wk after transplantation of cord blood gave rise to human burst-forming unit erythroid, colony-forming unit granulocyte/macrophage, or granulocyte/erythroid/macrophage/megakaryocyte colonies. Engraftment was observed for up to 6 mo in transgenic SCID mice, twice as long as nontransgenic littermates or previous studies in which transplanted SCID mice were given daily injections of growth factors. We conclude that the level and duration of engraftment of human cells in SCID mice can be improved by expression of human cytokine transgenes and that transgenic SCID mice are an efficient model system for the study of human hematopoiesis.