Safety testing for replication-competent retrovirus (RCR) is an important requirement in gene transfer clinical trials using retroviral vectors. A sensitive polymerase chain reaction (PCR) method is one approach to RCR detection. Only in the presence of RCR will the pol-env encoding sequences, necessary for viral replication and packaging, be amplified from proviral DNA in infected indicator cells. To avoid false-positive results in this assay it is crucial that indicator cell lines are free of endogenous retroviral sequences that could also be amplified with pol-env PCR primers. We screened candidate murine indicator cell lines and determined that while Mus dunni is free of detectable pol-env sequences, endogenous retroviral sequences do indeed exist in several cell lines and lead to false-positive results in the PCR assay for RCR. Furthermore, these endogenous retroviral sequences are expressed as RNA transcripts in NIH 3T3 and SC-1 cell lines, as determined by PCR amplification of cDNA but, nevertheless, do not give rise to replication-competent particles. We recognize the potential for murine cell lines to undergo spontaneous rearrangements of endogenous viral sequences in culture and give rise to recombinants containing newly acquired contiguous pol-env sequences. Indicator cell lines should thus be carefully selected and monitored on an ongoing basis when used in safety testing using PCR approaches for the detection of RCR.