Allogeneic HSCT offers a route for achieving immune tolerance via mixed chimerism and remains the sole curative option for many nonmalignant, autoimmune and metabolic diseases. Present-day improvements of nonmyeloablative protocols are increasing the safety of HSCT, thereby widening the target population and resurrecting the interest of HSCT application as a platform for tolerance induction in organ transplantation. Using high cell doses of T-cell-depleted (TCD) grafts has been shown to circumvent graft-vs-host disease, leaving graft rejection as the main hindrance due to the robust host immunity that remains after mild conditioning. In this review we highlight the advantages of utilizing unique non-alloreactive 'veto' cells, such as anti-third party central memory CD8 T cells (Tcm), to enable induction of mixed chimerism after megadose HSCT under nonmyeloablative conditioning. Co-administration of HSCT with veto Tcm allows for induction of mixed chimerism that was successfully translated into immune tolerance, as demonstrated by engraftment of donor-type skin grafts. These veto Tcm cells have been shown to specifically eradicate anti-donor host T cells, through lymph-node sequestration and deletion, thus sparing host immunity and circumventing the need for life-long immunosuppression. Hence, data indicate that this treatment modality of combined TCD HSCT and adoptive transfer of Tcm veto cells under nonmyeloablative conditions may serve as a valuable tool for treatment of patients with a wide array of disorders such as hemoglobinopathies, autoimmune diseases and as a prelude for organ tolerance.