To understand the phenomenon of early alloreactivity (EA) in younger children undergoing post-transplantation cyclophosphamide (PTCy)-based haploidentical transplantation, we studied the graft composition and the immune reconstitution in 32 consecutive patients (aged 2 to 25 years) undergoing PTCy and T cell costimulation blockade based peripheral blood stem cell transplantation with emphasis on CD45RA subset of regulatory T cells (Tregs). All but 1 engrafted, and 14 patients experienced EA (acute graft-versus-host disease grades II to IV, n = 8; and post-transplantation hemophagocytic syndrome, n = 6) with a cumulative incidence of 43.7%; 42% developed mild chronic graft-versus-host disease. The overall survival was 70.2% with a nonrelapse mortality of 16.8% at a median of 19 months. Age < 10 years, donor age > 45 years, and poor recovery of Tregs correlated with EA. Not Tregs but higher CD45RA Tregs in the graft was associated with less EA (11.7% versus 32.5%, P = .0001). Higher donor age correlated with a lower CD45RA Tregs in the graft (P = .01). However, only higher CD45RA Treg percentage in the graft favorably impacted EA as well as nonrelapse mortality and overall survival. Our study demonstrates a critical role for CD45RA Tregs in determining EA and outcome after PTCy-based haploidentical peripheral blood stem cell transplantation, and the age-related physiologic decline in this population might be responsible for adverse impact of donor age.