The induction of mixed chimerism (MC) is a powerful and effective means to achieve transplantation tolerance in rodent models. Host conditioning with irradiation or cytotoxic drugs has been used in many protocols for chimeric induction across allogeneic barriers. The deletion of alloreactive T cell clones has been described as the main mechanism responsible for the induction of a stable MC. In this study, we demonstrate that a stable MC and skin allograft tolerance can be established across MHC barriers by a noncytotoxic, irradiation-free approach using costimulation blockade plus rapamycin treatment. By using an adoptive transfer model of skin allograft and using specific Vbeta TCR probes, we demonstrated that deletion of donor-reactive cytopathic T cell clones is indeed profound in tolerant hosts. Nonetheless, the challenge of tolerant mixed chimeras with 5 million mononuclear leukocytes (MNL) from naive syngeneic mice was neither able to abolish the stable MC nor to trigger skin allograft rejection, a hallmark of peripheral, not central tolerance. Furthermore, in an adoptive transfer model, MNLs harvested from tolerant hosts significantly inhibited the capacity of naive MNLs to reject same donor, but not third-party, skin allografts. Moreover, when we transplanted skin allografts from stable tolerant chimeras onto syngeneic immune-incompetent mice, graft-infiltrating T cells migrated from the graft site, expanded in the new host, and protected allografts from acute rejection by naive syngeneic MNLs. In this model, both deletional and immunoregulatory mechanisms are active during the induction and/or maintenance of allograft tolerance through creation of MC using a potentially clinically applicable regimen.