A two-element protocol consisting of one donor-specific transfusion (DST) plus a brief course of anti-CD154 mAb greatly prolongs the survival of murine islet, skin, and cardiac allografts. To study the mechanism of allograft survival, we determined the fate of tracer populations of alloreactive transgenic CD8+ T cells in a normal microenvironment. We observed that DST plus anti-CD154 mAb prolonged allograft survival and deleted alloreactive transgenic CD8+ T cells. Neither component alone did so. Skin allograft survival was also prolonged in normal recipients treated with anti-CD154 mAb plus a depleting anti-CD8 mAb and in C57BL/6-CD8 knockout mice treated with anti-CD154 mAb monotherapy. We conclude that, in the presence of anti-CD154 mAb, DST leads to an allotolerant state, in part by deleting alloreactive CD8+ T cells. Consistent with this conclusion, blockade of CTLA4, which is known to abrogate the effects of DST and anti-CD154 mAb, prevented the deletion of alloreactive transgenic CD8+ T cells. These results document for the first time that peripheral deletion of alloantigen-specific CD8+ T cells is an important mechanism through which allograft survival can be prolonged by costimulatory blockade. We propose a unifying mechanism to explain allograft prolongation by DST and blockade of costimulation.