Myoblasts have properties that make them suitable vehicles for gene replacement therapy, and lysosomal storage diseases are attractive targets for such therapy. Type II Glycogen Storage Disease, a deficiency of acid alpha-glucosidase (GAA), results in the abnormal accumulation of glycogen in skeletal and cardiac muscle lysosomes. The varied manifestations of the enzyme deficiency in affected patient are ultimately lethal. We used a retroviral vector carrying the cDNA encoding for GAA to replace the enzyme in deficient myoblasts and fibroblasts and analyzed the properties of the transduced cells. The transferred gene was efficiently expressed, and the de novo-synthesized enzyme reached lysosomes where it digested glycogen. In enzyme-deficient myoblasts after transduction, enzyme activity rose to more than 30-fold higher than in normal myoblasts and increased about five-fold more when the cells were allowed to differentiate into myotubes. The transduced cells secreted GAA that was endocytosed via the mannose-6-phosphate receptor into lysosomes of deficient cells and digested glycogen. Moreover, the transduced myoblasts were able to fuse with and provide enzyme for GAA-deficient fusion partners. Thus, the gene-corrected cells, which appear otherwise normal, may ultimately provide phenotypic correction to neighboring GAA-deficient cells by fusion and to distant cells by secretion and uptake mechanisms.