Intrathymic injection of alloantigen in young adult rats is capable of mediating long-lived transplantation tolerance. In this study, we use a well-defined model of isolated hepatocyte transplantation to define the mechanisms of intrathymic induced tolerance. The recipient rats are Nagase analbuminemic rats (NAR) that are deficient in albumin, to allow for following transplant acceptance using metabolic and genetic markers. Tolerance to allogeneic hepatocyte transplants could be mediated by intrathymic injection of live allogeneic splenocytes, lethally irradiated splenocytes, or isolated hepatocytes. Intrathymic injection of live allogeneic splenocytes, but not of hepatocytes or irradiated splenocytes, resulted in donor microchimerism in peripheral lymphoid organs, with preferential expansion of CD4-positive T cells in the recipient spleens. Tolerance could be adoptively transferred from tolerant animals to naive recipients, but only from those animals that had been inoculated with intrathymic donor splenocytes. We conclude that donor microchimerism is found after intrathymic inoculation of live splenocytes, but is not required for tolerance induction and that microchimerism is not an absolute requirement for the generation of regulatory cells.