A five-month-old girl with autosomal-recessive osteopetrosis received a bone-marrow transplant from her five-year-old HLA-MLC-identical brother after preparation with cyclophosphamide and modified total-body irradiation. Engraftment was documented by chromosomal analysis. Anemia, thrombocytopenia, and leukoerythroblastosis corrected within 12 weeks of transplantation. Low serum calcium and elevated serum alkaline and acid phosphatase levels became normal. Serial x-ray studies revealed bony remodeling and new nonsclerotic bone formation. A pretransplantation bone biopsy revealed small marrow spaces, rare marrow elements, increased osteoclasts, and no bony resorption. After transplantation, osteoclasts were actively resorbing bone, and medullary cavities contained normal bone marrow. Fluorescent Y-body analysis after transplantation revealed donor (male) osteoclasts and recipient (female) osteoblasts. Monocyte bactericidal activity, markedly decreased before transplantation, became normal. Vision, hearing, growth, and development were progressively improving 16 months after transplantation. Allogeneic bone-marrow transplantation appears to be the treatment of choice in this fatal disorder.