Gene modification of hematopoietic stem cells (HSCs) has the potential to cure genetic, malignant and acquired diseases. Despite success in pre-clinical gene therapy studies, achieving genetic correction or a therapeutic response in humans has been challenging. HIV-1-based lentivirus vectors have come to the forefront of pre-clinical studies due to their ability to more effectively transduce quiescent HSCs. Drug resistance gene expression coupled to chemotherapy after HSC transplantation may support in vivo selection of gene-modified cells while protecting the patient from chemotoxicity. We hypothesized that lentivirus-mediated transfer of a methotrexate (MTX) resistance gene, Tyr22-dihydrofolate reductase (Tyr22-DHFR), into stem cells would support long-term stable gene expression in vivo and protect hematopoietic daughter cells from MTX toxicity. To test our hypothesis, we first generated high-titer lentivirus vectors expressing Tyr22-DHFR and green fluorescent protein (GFP) in different genetic configurations, and then compared MTX resistance, enzyme activity and GFP fluorescence in mouse and human cell lines including human embryonic stem cells (hESCs). Tyr22-DHFR-HSCs protected transplanted mice from MTX myelotoxicity, and conferred a significant survival advantage compared to MTX treated GFP-HSC transplanted mice. To assess the feasibility of a physiologic scale-up in a large animal model, we demonstrated DHFR-GFP expression in canine CD34+ cells and long-term engraftment of gene-modified cells in vivo. MTX administration increased gene-marking in the peripheral blood of one dog, without causing cytopenia. We also defined the optimal priming of HSCs (c-G-CSF/c-SCF BM), transduction conditions and MTX tolerated doses in dogs. Finally, we present a novel application of selective expansion of hESCs-derived cells in mouse xenografts. Methotrexate-resistant (MTXr)-DHFR hESCs gave rise to MTXr-GFP+ teratomas, indicating that that gene-modified cells retain their pluripotency during MTX treatment. MTXr-hESCs placed in stromal cell co-culture differentiated into GFP+ hemato-endothelial cells, including CD34+CD45+ subsets, which subsequently gave rise to MTXr-hematopoietic colony forming cells (CFCs). Finally, we showed that MTX administration of mice bearing hESC xenografts supported in vivo selection of Tyr22-DHFR-hESC-hematopoietic cells and increased engraftment of gene-modified cells in the bone marrow of treated mice. Taken together, these results show that lentivirus vectors effectively transduce MTXr-DHFR into HSCs, thereby preventing life-threatening myelotoxicity (as observed in our mouse studies), and supporting long-term engraftment of gene-modified cells in vivo. These studies mark significant progress of MTX resistance gene therapy toward clinical trials in humans.