Total lymphoid irradiation (TLI) with antithymocyte globulin (ATG) is a unique regimen that prepares recipients for allogeneic hematopoietic cell transplantation by targeting lymph nodes, while sparing large areas of the bone marrow. TLI is reported to increase the frequency of CD4(+)CD25(+)FoxP3(+) T-regulatory cells (Treg) relative to conventional T cells. In this study, barriers to hematopoietic stem cell (HSC) engraftment following this nonmyeloablative conditioning were evaluated. TLI/ATG resulted in profound lymphoablation but endogenous host HSC remained. Initial donor HSC engraftment occurred only in radiation exposed marrow sites, but gradually distributed to bone marrow outside the radiation field. Sustained donor engraftment required host lymphoid cells insofar as lymphocyte deficient Rag2γc(-/-) recipients had unstable engraftment compared with wild-type. TLI/ATG treated wild-type recipients had increased proportions of Treg that were associated with increased HSC frequency and proliferation. In contrast, Rag2γc(-/-) recipients who lacked Treg did not. Adoptive transfer of Treg into Rag2γc(-/-) recipients resulted in increased cell cycling of endogenous HSC. Thus, we hypothesize that Treg influence donor engraftment post-TLI/ATG by increasing HSC cell cycling, thereby promoting the exit of host HSC from the marrow niche. Our study highlights the unique dynamics of donor hematopoiesis following TLI/ATG, and the effect of Treg on HSC activity.