Peripheral blood stem cell transplantation (PBSCT) has been extended to treating hematologic disorders, but the benefits over bone marrow transplantation (BMT) still remain unclear, especially in nonmalignant hematologic disorders. In this study, we compared class I-II thalassemic children who underwent HLA-matched PBSCT and BMT for treatment. Conditioning regimens consisted of busulfan and cyclophosphamide, followed by cyclosporine +/- methotrexate for graft-versus-host disease (GVHD) prophylaxis. Using multivariate analysis, the outcomes of 87 PBSCT patients and 96 BMT patients were reported (median follow-up: 29 and 60 months, respectively). The median time to neutrophil and platelet recovery in PBSCT patients (11 and 18 days, respectively) was significantly lower than BMT patients (19 and 26 days, respectively) (P < .001). Grade II-IV acute GVHD was more frequent in PBSCT versus BMT group (72% versus 55%; P = .003) (relative risk = 1.75, 95% confidence interval [CI]: 1.20-2.57). The incidence of chronic GVHD was more frequent in the PBSCT versus BMT group (48% versus 19%; P < .001) (relative risk = 2.62, 95% CI: 1.43-4.82). There was no difference in the 2-year overall survival after PBSCT and BMT (83% and 89%, respectively). The 2-year disease-free survival was 76% in both groups. These results show some advantages of PBSCT, but to improve the risk of GVHD in PBSCT, a better conditioning and prophylaxis regimen is needed.