Studies in mice and humans demonstrate that transplantation of hematopoietic progenitors in numbers larger than commonly used ("megadose" transplants) overcomes major genetic barriers. In vitro studies suggest that veto cells, within the population of hematopoietic progenitors, facilitate this favorable outcome. Thus, when purified CD34+ cells were added to bulk mixed-lymphocyte reactions (MLRs), they suppressed CTLs against donor's stimulators but not against stimulators from a third party. This tolerizing activity depends on cell contact and can be blocked by the caspase inhibitor BD-FMK, suggesting that the effector host T cells are deleted by apoptosis upon interaction with the CD34+ cells. Early myeloid CD33+ cells generated by short-term ex vivo expansion of CD34+ cells also exhibit veto activity, and these cells can be grown in large numbers. Tolerance induction can be further enhanced by other veto cells. Perhaps the most potent veto cell is the CD8+ CTL. However, this cell is also associated with marked graft-versus-host disease (GVHD). GVHD can be separated from the veto activity by generating anti-third party CTLs under IL2 deprivation. Under such selective pressure, only the stimulated clones which make IL2 can survive, while anti-host clones die. In vivo studies show that such anti-third party veto CTLs can be used safely for tolerance induction without GVHD.