AIMS: Retroviral-mediated gene therapy has been proposed as a primary or adjuvant treatment for advanced cancer, because retroviruses selectively infect dividing cells. Efficacy of retroviral-mediated gene transfer, however, is limited in vivo. Although packaging cell lines can produce viral vectors continuously, such allo- or xenogeneic cells are normally rejected when used in vivo. Encapsulation using microporous membranes can protect the packaging cells from rejection. In this study, we used an encapsulated murine packaging cell line to test the effects of in situ delivery of a retrovirus bearing the herpes simplex virus thymidine kinase suicide gene in a rat model of orthotopic glioblastoma. MATERIALS AND METHODS: To test gene transfer in vitro, encapsulated murine psi2-VIK packaging cells were co-cultured with baby hamster kidney (BHK) cells, and the percentage of transfected BHK cells was determined. For in vivo experiments, orthotopic C6 glioblastomas were established in Wistar rats. Capsules containing psi2-VIK cells were stereotaxically implanted into these tumours and the animals were treated with ganciclovir (GCV). Tumours were harvested 14 days after initiation of GCV therapy for morphometric analysis. RESULTS: Encapsulation of psi2-VIK cells increased transfection rates of BHK target cells significantly in vitro compared to psi2-VIK conditioned medium (3 x 10(6) vs 2.3 x 10(4) cells; P<0.001). In vivo treatment with encapsulated packaging cells resulted in 3% to 5% of C6 tumour cells transduced and 45% of tumour volume replaced by necrosis after GCV (P<0.01 compared to controls). CONCLUSION: In this experimental model of glioblastoma, encapsulation of a xenogeneic packaging cell line increased half-life and transduction efficacy of retrovirus-mediated gene transfer and caused significant tumour necrosis.