Recombinant retroviruses are widely used for gene transfer into eukaryotic cells and exhibit significant potential for human gene therapy. Despite the utility of retroviral vectors, their design is still essentially empirical. We have constructed a series of reciprocal, double-gene vectors to compare the dual expression of beta-galactosidase (beta-gal) and neomycin phosphotransferase (neor) in a retroviral delivery system. The first gene of the pair was driven by the viral LTR promoter and the internal gene was regulated by either the SV40 virus early promoter or the cytomegalovirus (CMV) major late promoter. Clones of vector producer cells were isolated either by G418 selection for expression of neor, or by fluorescence-activated cell sorting for expression of beta-gal, and the activity of both genes was evaluated. In general, vectors using the SV40 promoter performed better than those with the CMV promoter, regardless of whether the selected gene was regulated by the LTR or the internal promoter. Southern analysis of clones indicated that loss of beta-gal gene function was related to significant rearrangements and deletions in vector structure. We also found that the arrangement of genes within the vector was important. When beta-gal preceded neor, gene expression and vector stability were markedly enhanced relative to vectors containing these genes in the inverse order.