Mixed hemopoietic chimerism has the potential to correct genetic hemological diseases (sickle cell anemia, thalassemia) and eliminate chronic immunosuppressive therapy following organ transplantation. To date, most strategies require either recipient conditioning (gamma-irradiation, depletion of the peripheral immune system) or administration of "mega" doses of bone marrow to facilitate reliable engraftment. Although encouraging, many issues remain that may restrict or prevent clinical application of such strategies. We describe an alternative, nonirradiation based strategy using a single dose of busulfan, costimulation blockade, and T cell-depleted donor bone marrow, which promotes titratable macrochimerism and a reshaping of the T cell repertoire. Chimeras exhibit robust donor-specific tolerance, evidenced by acceptance of fully allogeneic skin grafts and failure to generate donor-specific proliferative responses in an in vivo graft-versus-host disease model of alloreactivity. In this model, donor cell infusion and costimulation blockade without busulfan were insufficient for tolerance induction as donor-specific IFN-gamma-producing T cells re-emerged and skin grafts were rejected at approximately 100 days. When applied to a murine beta-thalassemia model, this approach allows for the normalization of hemologic parameters and replacement of the diseased red cell compartment. Such a protocol may allow for clinical application of mixed chimerism strategies in patients with end-stage organ disease or hemoglobinopathies.