Hand and composite tissue allotransplantation (CTA) holds great potential for reconstructive surgery but its development is currently limited by the side-effects of the immunosuppressive drugs. Induction of specific tolerance, a situation where the recipient does not mount an immune response against the allograft but remains fully immunocompetent, holds exciting promise. Generation of mixed hematopoietic chimerism by infusing the recipient with donor bone marrow cells has been shown to induce tolerance without chronic immunosuppression. Genetic matching of the donor and the recipient is another option for transplanting composite tissues with only an initial course of immunosuppression. Experiments demonstrated long-term survival of musculoskeletal allografts between MHC-matched miniature swine. Finally, new immunosuppressive agents with a more targeted action will reduce side-effects and may prevent the development of chronic rejection. Skin-specific immunosuppression is particularly useful for limb transplants since skin, regarded as the most antigenic component, is easily accessible to topical or irradiation therapies.