Sensitization to donor Ags is an enormous problem in clinical transplantation. In an islet allograft model, presensitization of recipients through donor-specific transfusion (DST) 4 wk before transplantation results in accelerated rejection. We demonstrate that combined DST with anti-CD154 (CD40L) therapy not only prevents the deleterious presensitization produced by pretransplant DST in the islet allograft model, it also induces broad alloantigen-specific tolerance and permits subsequent engraftment of donor islet or cardiac grafts without further treatment. In addition, our data strongly indicate that CTLA4-negative T cell signals are required to achieve prolonged engraftment of skin allograft or tolerance to islet allograft in recipients treated with a combination of pretransplant DST and anti-CD154 mAb. We provide direct evidence that a CD28-independent CTLA4 signal delivers a strong negative signal to CD4+ T cells that can block alloimmune MLR responses. In this study immune deviation into a Th2 (IL-4) response was associated with, but did not insure, graft tolerance, as the inopportune timing of B7 blockade with CTLA4/Ig therapy prevented uniform tolerance but did not prevent Th2-type immune deviation. While CTLA4-negative signals are necessary for tolerance induction, Th1 to Th2 immune deviation cannot be sufficient for tolerance induction. Combined pretransplant DST with anti-CD154 mAb treatment may be attractive for clinical deployment, and strategies aimed to selectively block CD28 without interrupting CTLA4/B7 interaction might prove highly effective in the induction of tolerance.