Organ transplantation has become the method of choice for the treatment of many diseases because of advances in both surgical and immunosuppressive techniques. These techniques have now progressed to the stage where satisfactory graft acceptance and survival can be achieved by the judicious choice of donor and recipient, and by the appropriate patient management. As a result of the improved quality of life of transplant recipients, an ever-increasing number of potential recipients are being added to the waiting lists. Despite the success of clinical transplantation, two key challenges for the field are (1) the dwindling number of suitable donors and (2)the adverse effects and the risks of long-term administration of immunosuppressive drugs. It is a well-established fact that the supply of organs for transplantation is not only inadequate but also worsening globally. Although education programs and various legal changes may increase the availability of donors, it is unlikely to solve the problem completely. The potential solutions being examined include the use of artificial organs, stem cells to engineer organs and tissues and xenotransplantation. Even though the first two options are appealing and shows potential, xenotransplantation is closest to clinical applications. The proposed use of pig organs for xenotransplantation has reintroduced the problem of hyperacute rejection, which results in the antibody-mediated destruction of a vascularized pig organ within minutes because of natural preformed antibodies. The expression of human complement regulators, either alone, or in combination, was initially used in an attempt to protect the xenograft. Several human complement regulators extended the survival of pig organs in primate transplant models from minutes or hours to days in unmodified recipients, and was further increased to 5 months with intense immunosuppression. A significant step for the field was not only the identification of the carbohydrate antigen recognized by naturally occurring human antibodies but, more importantly, the generation of homozygous pigs with a disruption in the gene that encodes the enzyme, α1,3galactosyltransferase. Using these Gal knockouts for pig-to-primate vascularized organ transplants, again using clinically inappropriate immunosuppression, showed survival times similar to those observed in the pigs expressing human complement regulators. Therefore, although inactivation of the α1,3galactosyltransferase gene prevents hyperacute rejection of vascularized organs, they still succumb to acute vascular rejection as a consequence of antibodies (natural or elicited) binding to and activating endothelial cells, or unidentified cross-species molecular incompatibilities. For transplantation, the major side effects of long-term immunosuppression are infection and malignancy. A major goal in transplantation for many years has been the induction of ‘transplant tolerance’—the long-term acceptance of the transplant with the maintenance of responses to nondonor antigens (such as viruses) without the need for chronic immunosuppression. This has involved immunological manipulations to re-educate the immune system to establish transplant tolerance and allow permanent survival of the graft. Despite continuing research in this area and success in small animal models, clinical tolerance remains elusive. Recently, interest has been renewed in the subsets of T cells, notably regulatory T cells (Tregs) and their potential role in tolerance induction. These Tregs can be identified by their expression of CD4, CD25 and the transcription factor, Foxp3. Foxp3 is currently the single best marker available for identifying Tregs, with stable expression of Foxp3, and is regarded as the ‘master switch’ for Treg function. For clinical transplantation, the ability to harness the potential of allograft-specific Treg cells would reduce the need for nonspecific immunosuppressive therapy currently required to prevent graft rejection, and may be a critical step toward inducing donor-specific tolerance and permanent graft survival. The following two Special Feature Reviews, which are contributions from the State of the Art Symposia at the recent Sydney Congress of the Transplantation Society, address progress made in these two areas: a review by Cowan and d’Apice on the current state of the field of xenotransplantation focusing on the complement and coagulation systems and their roles in vascular injury; and a review by Wang et al. on the role of histone deacetylases and their inhibitors on the generation of Foxp3+ Tregs with particular emphasis on transplantation tolerance induction. By a combination of both these approaches in the future, it is feasible that the dual problems of organ availability and long-term side effects of immunosuppression may be solved.