X-linked agammaglobulinemia (XLA) is a human immunodeficiency caused by mutations in Bruton tyrosine kinase (Btk) and characterized by an arrest in early B-cell development, near absence of serum immunoglobulin, and recurrent bacterial infections. Using Btk- and Tec-deficient mice (BtkTec(-/-)) as a model for XLA, we determined if Btk gene therapy could correct this disorder. Bone marrow (BM) from 5-fluorouracil (5FU)-treated BtkTec(-/-) mice was transduced with a retroviral vector expressing human Btk and transplanted into BtkTec(-/-) recipients. Mice engrafted with transduced hematopoietic cells exhibited rescue of both primary and peripheral B-lineage development, recovery of peritoneal B1 B cells, and correction of serum immunoglobulin M (IgM) and IgG(3) levels. Gene transfer also restored T-independent type II immune responses, and B-cell antigen receptor (BCR) proliferative responses. B-cell progenitors derived from Btk-transduced stem cells exhibited higher levels of Btk expression than non-B cells; and marking studies demonstrated a selective advantage for Btk-transduced B-lineage cells. BM derived from primary recipients also rescued Btk-dependent function in secondary hosts that had received a transplant. Together, these data demonstrate that gene transfer into hematopoietic stem cells can reconstitute Btk-dependent B-cell development and function in vivo, and strongly support the feasibility of pursuing Btk gene transfer for XLA.