Immune responses to allografts represent a major barrier in organ transplantation. Immune tolerance to avoid chronic immunosuppression is a critical goal in the field, recently achieved in the clinic by combining bone marrow transplantation with kidney transplantation following non-myeloablative conditioning. At high levels of chimerism, such protocols can permit central deletional tolerance, yet with a significant risk of graft-versus-host disease (GVHD). In contrast, transient chimerism-based tolerance is devoid of GVHD risk and appears to initially depend on regulatory T cells followed by a gradual, presumably peripheral, clonal deletion of donor-reactive T cells. Here, we review recent mechanistic insights into tolerance and the development of more robust and safer protocols for tolerance induction that will be guided by innovative immune monitoring tools.