Induction of mixed chimerism has the potential to overcome the current limitations of transplantation, namely chronic rejection, complications of immunosuppressive therapy and the need for xenografts to overcome the current shortage of allogeneic organs. Successful achievement of mixed chimerism had been shown to tolerize T cells, B cells and possibly natural killer cells, the lymphocyte subsets that pose major barriers to allogeneic and xenogeneic transplants. Current understanding of the mechanisms involved in tolerization of each cell type is reviewed. Considerable advances have been made in reducing the potential toxicity of conditioning regimens required for the induction of mixed chimerism in rodent models, and translation of these strategies to large animal models and in a patient are important advances toward more widespread clinical application of the mixed chimerism approach for tolerance induction.