The stem rust resistance gene Sr37, an effective gene against the newly emerged Ug99 races of Puccinia graminis f. sp. tritici in wheat, was originally transferred from wild Timopheev's wheat (Triticum timopheevii Zhuk, AAGG genomes) through a translocation between wheat chromosome 4B and T. timopheevii chromosome 4G. A previous study showed that Sr37 is located on a large uncharacterized 4G chromosomal segment in the original translocation line W3563. Because of linkage drag associated with the 4G chromosomal segment, Sr37 has not been used in wheat breeding. The objectives of this study were to reduce the size of the 4G chromosome segment carrying Sr37 and to characterize the 4G segments in W3563 and new introgression lines. In this study, W3563 was first characterized using microsatellite markers and fluorescent genomic in-situ hybridization. Eight microsatellite markers were identified to associate with the 4G segment, which interstitially spans approximately 62% of the translocated chromosome. To reduce the size of the 4G segment, we utilized the ‘Chinese Spring’ (CS) ph1b mutant to induce new homoeologous recombination through a recently established scheme of marker-assisted chromosome engineering. From a large BC2F1 population derived from the successive backcrosses of a CS ph1b mutant and CS to W3563, respectively, we developed five new introgression lines with Sr37 on shortened 4G segments. These new wheat germplasm lines will be usable for developing wheat cultivars resistant to Ug99 races of stem rust.