Bone marrow transplantation is a curative treatment for many diseases, including leukemia, autoimmune diseases, and a number of immunodeficiencies. Recently, it was claimed that bone marrow cells transdifferentiate, a much desired property as bone marrow cells are abundant and therefore could be used in regenerative medicine to treat incurable chronic diseases. Using a Cre/loxP system, we studied cell fusion after bone marrow transplantation. Fused cells were chiefly Gr-1(+), a myeloid cell marker, and found predominantly in the bone marrow; in parenchymal tissues. Surprisingly, fused cells were most abundant in the kidney, Peyer's patches, and cardiac tissue. In contrast, after cell fusion with embryonic stem cells, bone marrow cells were reprogrammed into new tetraploid pluripotent stem cells that successfully differentiated into beating cardiomyocytes. Together, these data suggest that cell fusion is ubiquitous after cellular transplants and that the subsequent sharing of genetic material between the fusion partners affects cellular survival and function. Fusion between tumor cells and bone marrow cells could have consequences for tumor malignancy.