Background: Periprosthetic tissue formation and local inflammation that are associated with wear debris contribute to the pathogenesis of aseptic loosening of a prosthesis. This study evaluated a retrovirus-mediated gene therapy with use of a novel xenograft-based animal model. Methods: Human periprosthetic tissues obtained from patients during revision arthroplasty performed because of aseptic loosening of a prosthetic joint were transplanted into the left quadriceps and paravertebral muscles of severe combined immunodeficient (SCID) mice. The engrafted tissues were recovered seven, fifteen, or thirty days after implantation for histological and molecular analyses. The periprosthetic tissues were incubated with retroviruses encoding for human interleukin-1 receptor antagonist (hIL-1Ra) or bacteria β-galactosidase (LacZ) at 37°C for three hours prior to implantation to evaluate their responses to gene modification. Results: The human periprosthetic tissues were well accepted in SCID mice for up to thirty days, with angiogenesis occurring in the majority of the implanted tissue sections. The histological appearance was consistent between the recovered graft tissue and the original donor tissue. Strong expression of interleukin-1, tumor necrosis factor, and interleukin-6 was detected in the xenografts with use of immunohistochemical stains. Histological analysis revealed that interleukin-1 receptor antagonist gene modification significantly decreased the total number of inflammatory cells (p < 0.01) in engrafted human tissue containing implant wear debris. Real-time reverse transcription-polymerase chain reaction and immunohistochemical staining showed declining expression levels of interleukin-1 and tumor necrosis factor following interleukin-1 receptor antagonist gene transfer in comparison with LacZ-transduced or virus-free controls. Conclusions: Human periprosthetic tissue can survive in the SCID mouse host for up to thirty days and responds to the interleukin-1 receptor antagonist gene transfer with the amelioration of inflammation. Clinical Relevance: The human periprosthetic tissue-SCID mouse chimera has been characterized in this study as a useful model to explore the properties of human periprosthetic tissue in vivo, laying the foundation for potential clinical application of gene therapy in aseptic loosening.