This CIRM grant was designed to explore the potential of human embryonic stem cells to develop into cells found in the blood, and to adapt these stem cells with genetic approaches to combat infection by the AIDS virus. Over the course of this grant we made significant progress in showing that human embryonic stem cells can develop into several types of blood cells. Importantly this includes T lymphocytes, including cells of the CD4+ T cell lineage and cells of the macrophage lineage, which are the main cell types that can be infected by the AIDS virus. We had originally proposed several genetic strategies to either prevent HIV from productively infecting target cells, or to allow cells to directly attack virally infected target cells. To date we have shown that we can add new genes into human embryonic stem cells, and that we can control their expression in mature T lymphocytes derived from these stem cells, however the process of development of T cells from embryonic stem cells is very difficult and inefficient. We had the most success with one of our three genetic approaches, however to best test the efficacy of this approach, we took a step back and assessed its usefulness using human bone marrow-derived stem cells, which are much easier to convert into mature human T lymphocytes than are human embryonic stem cells. The successful strategy involved the genes for a cell surface molecule, called the T cell receptor (TCR). The TCR is the molecule that normal T lymphocytes use to target and attack foreign or infected cells in the body. These molecules are exquisitely specific for particular foreign particles, and will only recognize a particular pathogenic agent. Thus for example, a TCR specific for measles virus will not detect cells infected with the AIDS virus. We engineered genes encoding a TCR that specifically recognized a part of the AIDS virus that could be detected on infected cells, and inserted these genes into the bone marrow stem cells. Following this, we directed the development of these genetically altered stem cells into T lymphocytes, by implanting them into a mouse that contained human immune tissues required for the development of these cells into a mature state. This strategy allowed the genetically engineered stem cells to develop into CD8+ “killer” T lymphocytes that could detect and kill HIV infected cells. Theses T lymphocytes did not kill normal, uninfected cells, thus we engineered cells that could target and eliminate HIV infected cells. We are continuing to explore this system, and to adapt and improve this method such that it can be employed with human embryonic stem cells.