Long-term survival after lung transplantation is limited by acute and chronic graft rejection. Induction of immune tolerance by first establishing mixed hematopoietic chimerism (MC) is a promising strategy to improve outcomes. In a preclinical canine model, stable MC was established in recipients after reduced-intensity conditioning and hematopoietic cell transplantation from a DLA-identical donor. Delayed lung transplantation was performed from the stem cell donor without pharmacological immunosuppression. Lung graft survival without loss of function was prolonged in chimeric (n = 5) vs. nonchimeric (n = 7) recipients (p < or = 0.05, Fisher's test). There were histological changes consistent with low-grade rejection in 3/5 of the lung grafts in chimeric recipients at > or =1 year. Chimeric recipients after lung transplantation had a normal immune response to a T-dependent antigen. Compared to normal dogs, there were significant increases of CD4+INFgamma+, CD4+IL-4+ and CD8+ INFgamma+ T-cell subsets in the blood (p < 0.0001 for each of the three T-cell subsets). Markers for regulatory T-cell subsets including foxP3, IL10 and TGFbeta were also increased in CD3+ T cells from the blood and peripheral tissues of chimeric recipients after lung transplantation. Establishing MC is immunomodulatory and observed changes were consistent with activation of both the effector and regulatory immune response.