In contrast to immune restrictions that pertain for solid organ transplants, the tolerogenic milieu of the eye permits successful corneal transplantation without systemic immunosuppression, even across a fully MHC disparate barrier. Here we show that recipient and donor expression of decay accelerating factor (DAF or CD55), a cell surface C3/C5 convertase regulator recently shown to modulate T-cell responses, is essential to sustain successful corneal engraftment. Whereas wild-type (WT) corneas transplanted into multiple minor histocompatibility antigen (mH), or HY disparate WT recipients were accepted, DAF's absence on either the donor cornea or in the recipient bed induced rapid rejection. Donor or recipient DAF deficiency led to expansion of donor-reactive IFN-gamma producing CD4(+) and CD8(+) T cells, as well as inhibited antigen-induced IL-10 and TGF-beta, together demonstrating that DAF deficiency precludes immune tolerance. In addition to demonstrating a requisite role for DAF in conferring ocular immune privilege, these results raise the possibility that augmenting DAF levels on donor corneal endothelium and/or the recipient bed could have therapeutic value for transplants that clinically are at high risk for rejection.