Graft-versus-host disease (GVHD) and failure of engraftment limit clinical bone marrow transplantation (BMT) to patients with closely matched donors. Engraftment failure of purified allogeneic hematopoietic stem cells (HSCs) has been decreased in various BMT models by including donor BM-derived CD8(+)/alphabetagammadeltaTCR(-) facilitating cells (FCs) or CD8(+)/alphabetaTCR(+) T cells in the BM inoculum. To aggressively investigate the GVHD potential of these donor CD8(+) populations, a purified cell model of lethal GVHD was established in a murine semiallogeneic parent --> F(1) combination. Lethally irradiated recipients were reconstituted with purified donor HSCs alone or in combination with splenic T cells (T(SP)), BM-derived T cells (T(BM)), or the FC population. In marked contrast to the lethal GVHD present in recipients of HSCs plus T(SP) or CD8(+) T(BM), recipients of donor HSC+FC inocula did not exhibit significant clinical or histologic evidence of GVHD. Instead, HSC+FC recipients were characterized by increased splenocyte expression of transforming growth factor-beta (TGF-beta) and the induction of the regulatory T-cell genes CTLA4, GITR, and FoxP3. These findings suggest that the FCs, which express a unique FCp33-TCRbeta heterodimer in place of alphabetaTCR, permits HSC alloengraftment and prevents GVHD through the novel approach of regulatory T-cell induction in vivo.