An obstacle confronting gene therapy in stem cells is transcriptional silencing of the vector. Here, we discuss recent data indicating that oncoretrovirus and lentivirus vectors are silenced by multiple epigenetic pathways that result in DNA methylation and histone modifications. Both vector types can be variegated in stem cells and expression is often extinguished during differentiation. We propose a novel model of retrovirus silencing in which epigenetic pathways compete to recruit histone deacetylases, de novo methyltransferases, histone H1 and MeCP2 to the provirus. These chromatin modifications may act in concert with heterochromatin at or near the integration site to establish silencing or variegation respectively. Retrovirus vector designs for stem cells should delete virus silencer elements, incorporate strong positive regulatory elements and insulators, and avoid non-mammalian reporter genes. In addition, cancer stem cells that continually repopulate a growing tumour may share silencing pathways with normal stem cells. Ultimately, optimized vector designs may prove to be valuable tools for gene therapy of both normal and cancer stem cells.