Autoimmune diseases are a significant cause of death and morbidity, affecting up to 5% of the population. At present, there is no cure. Autologous bone marrow transplantation has been promoted as a treatment for achieving disease reversal and long-term remission. However, clinical trials in progress in Europe and North America report a significant risk of relapse. Here, we have addressed whether we can establish tolerance in an active autoimmune disease model by thymic expression of autoantigen. We show that tolerance and disease resistance can indeed be established in transgenic mice that spontaneously develop granulocyte macrophage colony stimulating factor-induced autoimmune gastritis, by mating them with disease-resistant transgenic mice that target autoantigen to the thymus. T cells from these double-transgenic mice are non-responsive to gastric antigen in vitro and fail to initiate disease following transfer to naive recipients. Further, we show that transplantation with bone marrow from disease-resistant transgenic mice renders recipient mice with gastritis tolerant to autoantigen as shown by a dramatic fall in autoantibody levels and T cell non-responsiveness to antigen in vitro. We suggest that genetically modified bone marrow targeting autoantigen to the thymus may be used to establish tolerance and prevent relapse of autoimmune disease following autologous bone marrow transplantation.