Bone marrow transplantation (BMT) results in hematopoietic chimeras that demonstrate donor specific tolerance to tissue and cellular grafts. The clinical application of chimerism to induce tolerance is limited by the morbidity associated with human BMT: failure of engraftment, graft-versus-host disease (GVHD), and toxic host conditioning. BMT in an immunologically mature host has until recently been believed to require complete ablation of the host's immune system to allow donor engraftment. Lethal conditioning is associated with significant morbidity and mortality. Stable multilineage mixed allogeneic chimerism has more recently been achieved in mice using partial myeloablation prior to BMT. Chimeras prepared in this fashion exhibit donor specific tolerance in vitro and in vivo similar to lethally-conditioned recipients. A second factor that has limited the widespread application of BMT to nonmalignant disease, including attempts to induce tolerance, is GVHD. Although T-cell depletion of donor marrow reduces the incidence of GVHD, engraftment is often jeopardized. Although highly purified stem cells (SC) engraft at relatively low doses in syngeneic recipients, they do not durably engraft in MHC-disparate recipients. It has recently become clear that a second cell (facilitating cell) that enhances bone marrow engraftment and minimizes the occurrence of GVHD is required for SC to engraft in MHC-disparate recipients. Methods to optimize engraftment yet minimize GVHD may provide an approach to apply BMT clinically. With decreased morbidity through incomplete recipient conditioning and the ability to engineer a bone marrow graft to contain only the desired cells to optimize engraftment, BMT may provide a reasonable strategy to treat nonmalignant diseases including enzyme deficiencies, hemoglobinopathies, autoimmune diseases, and species-specific viral infections such as HIV. BMT-induced donor specific tolerance may benefit recipients of solid organ transplants by eliminating the need for nonspecific immunosuppression and by preventing chronic rejection. This review will focus on approaches to enable BMT yet minimize recipient morbidity and mortality.