Bone marrow transplantation is a high-visibility, high-technology discipline with a growing list of potentially curative applications in neoplastic, hematologic, immunologic, and genetic diseases of children. The clinical problems experienced by children who have received bone marrow grafts involve pediatricians in both general and subspecialty practice and require a working knowledge of the applied immunobiology of bone marrow transplantation. As the transplantation procedure has evolved from a research tool to an established therapeutic modality, collaboration between basic scientists and clinicians has led to a greater understanding of the pathophysiology of the immunobiologic events that occur after allogeneic bone marrow transplantation and, thus, to improvements in the clinical care of transplant recipients. As its applications in pediatric medicine grow, bone marrow transplantation presents additional challenges for the future: expansion of the allogeneic donor pool, use of more effective or aggressive preparative regimens and autologous bone marrow-purging strategies, more effective prevention and treatment of graft-versus-host disease, and development of gene-replacement therapy by infusion of modified autologous bone marrow cells.