This article reviews recent reports that have addressed the role of multilineage donor hematopoietic cell microchimerism in the induction and maintenance of organ transplant tolerance. A major focus of the search for a mechanistic explanation for tolerance induction by microchimerism has been donor-derived dendritic cell progenitors that have been shown to have tolerogenic potential. Greater understanding of the bidirectional donor-host leukocyte interactions that occur after organ transplantation may allow development of improved therapeutic strategies based on tolerance-promoting manipulation of these interactions.