The emergence of leukemia following gene transfer to restore common cytokine receptor gamma chain (gammaC) function in X-linked severe combined immunodeficiency (SCID-X1) has raised important questions with respect to gene therapy safety. To explore the risk factors involved, we tested the oncogenic potential of human gammaC in new strains of transgenic mice expressing the gene under the control of the CD2 promoter and locus control region (LCR). These mice demonstrated mildly perturbed T-cell development, with an increased proportion of thymic CD8 cells, but showed no predisposition to tumor development even on highly tumor prone backgrounds or after gamma-retrovirus infection. The human CD2-gammaC transgene rescued T and B-cell development in gammaC(-/-) mice but with an age-related delay, mimicking postnatal reconstitution in SCID-X1 gene therapy subjects. However, we noted that gammaC(-/-) mice are acutely susceptible to murine leukemia virus (MLV) leukemogenesis, and that this trait was not corrected by the gammaC transgene. We conclude that the SCID-X1 phenotype can be corrected safely by stable ectopic expression of gammaC and that the transgene is not significantly oncogenic when expressed in this context. However, an underlying predisposition conferred by the SCID-X1 background appears to collaborate with insertional mutagenesis to increase the risk of tumor development.