For the treatment of monogenetic hematological disorders, restoration of transgene expression in affected cell populations is generally considered to have beneficial effects. However, X-linked chronic granulomatous disease (XCGD) is unique since the appearance of functional neutrophils in the peripheral blood following hematopoietic stem cell gene therapy is transient only. One contributing factor could be the occurrence of detrimental effects secondary to ectopic gp91phox expression in neutrophils, which has not been formally demonstrated previously. This study uses iPSCs to model XCGD, which allows the process of differentiation to be studied intensely in vitro. Alpharetroviral vectors carrying a ubiquitous promoter were used to drive the “ectopic” expression of codon optimized gp91phox cDNA. In the mature fraction of neutrophils differentiated from transduced XCGD-iPSCs, cellular recovery in terms of gp91phox expression and reactive oxygen species production was abruptly lost before cells had fully differentiated. Most critically, ectopic gp91phox expression could be identified clearly in the developing fraction of the transduced groups, which appeared to correspond with reduced cell viability. It is possible that this impedes further differentiation of developing neutrophils. Therefore, affording cellular protection from the detrimental effects of ectopic gp91phox expression may improve XCGD clinical outcomes.