The success of allogeneic stem cell transplantation and solid-organ transplantation owes much to improvements in the immunosuppressive regimens that prevent graft-versus-host disease (GVHD) or suppress allograft rejection. A better understanding of the immune mechanisms underlying induction of immunological tolerance is the key to successful transplantation. Polyclonal antibodies such as antithymocyte globulins (ATG) have been used for decades. The common belief is that ATG efficacy relies on its capacity to deplete T lymphocytes. The aim of this review is to offer an overview of the recent findings that have been demonstrated in ATG's immunomodulatory activity. The polyclonal nature of ATG is reflected in its diverse effects on the immune system: (1) T-cell depletion in blood and peripheral lymphoid tissues through complement-dependent lysis and T-cell activation and apoptosis; (2) modulation of key cell surface molecules that mediate leukocyte/endothelium interactions; (3) induction of apoptosis in B-cell lineages; (4) interference with dendritic cell functional properties; and (5) induction of regulatory T and natural killer T cells. As a consequence, ATG provides multifaceted immunomodulation paving the way for future applications and suggesting that the use of ATG should be included in the immunosuppression therapeutic armamentarium to help reduce the incidence of organ rejection and GVHD.