Treatment of nonmalignant childhood disorders by bone marrow transplantation (BMT) is limited by toxicity from preparatory regimens and immune consequences associated with engraftment of allogeneic donor cells. Using costimulatory blockade (anti-CD40L mAb and CTLA-4Ig) combined with high-dose BMT in nonablated neonates, we obtained engraftment and established tolerance using both partially MHC mismatched (H2g7 into H2b) and fully mismatched BM (H2s into H2b). Recipients were mucopolysaccharidosis type VII (MPS VII) mice with lysosomal storage disease in order to assess therapeutic outcome. Recipients treated with donor lymphocyte infusion (DLI) amplified microchimerism to full donor. Recipients without DLI maintained long-term engraftment, tolerance, and had extended life spans. DLI increased donor cell mediated replacement of beta-glucuronidase (GUSB) activity in all tissues and maintained clearance of lysosomes better than in non-DLI-treated mice. DLI amplification of partially mismatched BM and fully mismatched BM caused late onset chronic GvHD in 56% and 100% of recipients, respectively.