One of the major drawbacks for unrelated donor (UD) bone marrow transplantation (BMT) is graft-versus-host disease (GVHD). Despite results from randomized trials, antithymocyte globulin (ATG) is not routinely included for GVHD prophylaxis in UD BMT by many centers. One of ways to demonstrate the usefulness of rabbit ATG in UD BMT is to evaluate how its results approximate to those observed in matched related (MRD) BMT. Therefore, we compared the outcomes between UD BMT with rabbit ATG (Thymoglobulin) for GVHD prophylaxis (n = 25) and MRD BMT (n = 91) for leukemia and myelodysplasia. All but one patient received a myeloablative conditioning regimen. Grades II-IV acute GVHD were similar (39.5% vs. 36%, p = 0.83); however, MRD BMT recipients developed more moderate-severe chronic GVHD (36.5% vs. 8.6%, p = 0.01) and GVHD-related deaths (32.5% vs. 5.6%, p = 0.04). UD BMT independently protected against chronic GVHD (hazard ratio 0.23, p = 0.04). The 6-month transplant-related mortality, 1-year relapse incidence, and 5-year survival rates were similar between patients with non-advanced disease in the MRD and UD BMT groups, 13.8% vs. 16.6% (p = 0.50), 20.8% vs. 16.6% (p = 0.37), and 57% vs. 50% (p = 0.67), respectively. Stable full donor chimerism was equally achieved (71.3% vs. 71.4%, p = 1). Incorporation of rabbit ATG in UD BMT promotes less GVHD, without jeopardizing chimerism evolution, and may attain similar survival outcomes as MRD BMT for leukemia and myelodysplasia especially in patients without advanced disease.