The immunoregulatory role of human donor bone marrow cells (DBMC) has been studied extensively in our laboratory using in vitro and ex vivo assays. However, new experimental systems that can overcome the limitations of tissue culture assays but with more clinical relevance than purely animal experimentation, needed to be generated. Therefore we have developed a new human peripheral blood lymphocyte (PBL) severe combined immunodeficient (SCID) mouse islet transplantation model without the occurrence of graft-versus-host disease (GvHD) and have used it to evaluate the tolerogenic effects of DBMC. Nonobese diabetogenic (NOD)-SCID mice were transplanted with human deceased donor islets and were reconstituted with human PBL (allogeneic to islets; denoted as recipient) with or without DBMC from the islet donor. It was observed that the most cellularly economical dose was 3000 islets per animal and that injection into the portal vein was better than implantation under the kidney capsule. Even though maximal lymphoid reconstitution was observed with 40-million fresh and anti-CD3 activated recipient PBL (conventional method), the mice developed severe graft GvHD. However, with the new method of reconstitution where animals were injected with 20-million anti-CD3-activated plus 40-million anti-donor-activated recipient PBL, no discernible GvHD was observed. More importantly, this latter method was associated with islet transplant rejection, which in turn could be abrogated by co-injection of the animals with DBMC. These in vivo results confirmed our previous in vitro observations that human DBMC have regulatory activity.