This is the first study to examine the outcomes in 54 patients with hematologic malignancies who received an HLA-matched related donor bone marrow (BM, n = 42) or GCSF-mobilized peripheral blood stem cells (PBSC, n = 12) following identical nonmyeloablative conditioning with the intention of induction of mixed chimerism (MC) followed by prophylactic donor leukocyte infusion (pDLI) to convert MC to full donor chimerism (FDC) and capture a graft-versus-tumor effect without clinical graft-versus-host disease (GVHD). Neutrophil and platelet recovery were faster and transfusion requirement was less in PBSC recipients (P < 0.05). A total of 48% of BMT recipients achieved FDC with a median conversion time of 84 days, including 13 following pDLI. In contrast, 83% (P = 0.04) in the PBSC group had spontaneous FDC at a median of 14 days, precluding the administration of pDLI. There was no significant difference in the incidences of acute or chronic GVHD, though the rates of chronic GVHD were considerably higher in PBSC group than in the BM group (6/7, 86% vs 10/24, 42%). CD4 and CD8 T-cell recovery was faster in PBSC recipients. In PBSC recipients, a higher number of CD34+ cells was associated with increased rates of severe, grade III-IV acute GVHD.