IMMUNOLOGICAL TOLERANCE has been defined as a lack of an immune response to a given antigen while maintaining full reactivity to other antigens. Transplantation tolerance as such is therefore a lack of response toward alloantigens. This is in sharp contrast to immunosuppression where the reactivity to most if not all antigens is decreased. However, such “a lack of an immune response” to a given antigen is truly a misnomer. Transplantation tolerance is an induced state, attributed to a signaling cascade, which ultimately leads to a decision of sparing cells expressing alloantigens from destruction. To establish allotolerance it is therefore important to fully understand the pathways determining the fate of responding T cells. T-cell precursors, derived from the bone marrow, enter the subcapsular region of the thymus where they develop into naive T cells. During this process they up-regulate both CD4 and CD8 molecules and undergo series of T-cell receptor (TCR) gene rearrangements. This allows interaction with bone marrow-derived dendritic cells expressing self-peptides in a complex with MHC molecules. This allows selection of T-cell precursors capable of engaging self-peptide MHC complexes, a process termed “positive selection.” T-cell precursors that engage too tightly, on the other hand, are eliminated during negative selection. Only a small proportion of T-cell precursors emigrate out of the thymus into the peripheral circulation as naive T cells. This selection process ensures that naive T cells have optimal affinity for self-peptide MHC complexes expressed on peripheral tissues. Such interaction is important for the survival of peripheral naive T cells, but does not stimulate the T cells to awaken the effector arm of the immune response. Elimination of T-cell precursors, often referred to as “central tolerance,” is an extremely efficient mechanism to deplete autoreactive T cells. However, some autoreactive T cells do escape into the periphery, where peripheral mechanisms exist to prevent autoimmunity (ie, peripheral tolerance). In this article I will review some of the mechanisms involved and how they might be exploited to induce transplantation tolerance. One approach to induce central tolerance has been to generate bone marrow chimera, where a “new” peripheral immune system derived from both the host as well as the donor is generated. Initial protocols included irradiation (total body or thymus) and/or cytoreductive therapy with either T-cell-depleting antibodies or chemotherapy prior to bone marrow transplantation. This approach allowed donorand host-derived dendritic cells of bone marrow origin to migrate into the thymus, present donor, and self-antigens, and induce negative selection (ie, deletion) of reactive T-cell precursors. Subsequent solid organ transplant from same donor therefore becomes tolerant, whereas a 3rd-party organ will be rejected. The presence of donor and host peripheral leukocytes (ie, chimerism) is therefore a marker of tolerance and does not itself cause the tolerance state. However, treatment protocols that are based on chimerism are highly toxic due to myeloablation and high risk of graft-versus-host disease (GVHD). Recently, these protocols have been modified to use CD40: CD154 and CD80/CD86:CD28 costimulation blockade instead of irradiation and T-cell depletion prior to bone marrow transplant. This resulted in bone marrow chimerism and prolonged graft survival or tolerance to the donor skin grafts. The mechanisms by which blocking CD40: CD154 interaction induces tolerance are not completely understood but seem to involve thymus-independent deletion of donor-reactive CD4 T cells. Hopefully studies in larger animals will be able to adopt the latter, less toxic, protocol for tolerance induction to be subsequently taken into clinical trials. Multiple peripheral mechanisms exist to control autoreactive T cells that escape negative selection in the thymus based upon the requirement for presentation of antigens by professional antigen-presenting cells (APC). The engagement of the TCR with peptide MHC complex provides antigen specificity but requires a second, costimulatory, signal for maximal proliferation and differentiation into effector cells. Costimulatory receptors are absent on most peripheral tissues, while they are clustered on professional APCs. Antigens are therefore most efficiently presented by the APC, which activates the responding T cells to proliferate and differentiate into effector cells. The CD28 receptor is expressed on T cells, and its ligands CD80 and CD86 were the first costimulatory pathways identified; subsequently multiple other ligands have been identified. Another important costimulatory molecule is CD154 (CD40 ligand) expressed on T cells, which binds CD40 on APCs. Ligation of CD40 and CD154 sends a signal into the