In this review, we examine the applicability of the vascularized bone marrow transplant (VBMT) as an alternative to conventional bone marrow transplantation (BMT). As a new surgical approach, the VBMT is unique by transplantation of the stromal environment that eliminates the need for an engraftment period, provides critical signaling and modulatory functions, and may potentiate tolerance induction. Thus far, VBMT studies have demonstrated an absence of graft-versus-host disease (GVHD) and robust engraftment into nonmanipulated as well as irradiated recipients with evidence of immunological tolerance. Further investigation is needed to determine the applicability of VBMT as an alternative to BMT.