The gene BLM, mutated in Bloom syndrome (BS), encodes the nuclear protein BLM, which when absent, as it is from most BS cells, results in genomic instability. A manifestation of this instability is an excessive rate of sister-chromatid exchange (SCE). Here we describe the effects on this abnormal cellular phenotype of stable transfection of normal BLM cDNAs into two types of BS cells, SV40-transformed fibroblasts and Epstein-Barr virus (EBV)-transformed lymphoblastoid cells. Clones of BLM-transfected fibroblasts produced normal amounts of BLM by western blot analysis and displayed a normal nuclear localization of the protein by immunofluorescence microscopy. They had a mean of 24 SCEs/46 chromosomes, in contrast to the mean of 69 SCEs in controls transfected only with the vector. BLM-transfected fibroblast clones that expressed highest levels of the BLM protein had lowest levels of SCE. The lymphoblastoid cells transfected with BLM had SCE frequencies of 22 and 42 in two separate experiments in which two different selectable markers were used, in contrast to 57 and 58 in vector-transfected cells; in this type cell, however, the BLM protein was below the level detectable by western blot analysis. These experiments prove that BLM cDNA encodes a functional protein capable of restoring to or toward normal the uniquely characteristic high-SCE phenotype of BS cells.