To investigate mechanisms of stem cell graft rejection we studied the allo-stimulatory potential of G-CSF mobilized peripheral blood progenitor cells (PBPC). CD34+ cells were purified (>95%) in a two-step procedure using immunoaffinity columns for CD34 selection and T-depletion. The capacity of CD34+ cells to stimulate allogeneic T-cell responses was compared with other cells from the same individual. CD34+ cells induced potent proliferative responses at stimulator:responder ratios of 1:20, but were approximately 50-fold less efficient compared to dendritic cells. Furthermore, CD34+ cells primed responses from partially matched allogeneic T cells in bulk cultures. Dual-colour flow cytometry showed that the co-stimulatory molecules B7.1, CD40 and ICAM-1 were absent on resting CD34-positive progenitor cells, but were induced during incubation with allogeneic lymphocytes due to a cytokine-mediated effect. Up-regulation of accessory molecules on CD34+ cells was reproduced by incubation with interferon-gamma or GM-CSF which enhanced the allo-stimulatory activity of CD34+ cells. Blocking studies with inhibitory antibodies suggested co-stimulatory functions for B7.2, ICAM-3, CD40 and LFA-3. CD34+ cells were more efficient in inducing allogeneic T-cell responses when compared to the unprocessed leukapheresis products. The reduced allo-stimulatory ability of G-CSF mobilized PBPC could be explained by the presence of CD3+ 4+ and CD3+ 8+ lymphocytes with suppressor activity. We conclude that current methods of stem cell selection for transplantation do not avoid allosensitization of the recipient and that further graft manipulation with add-back of lymphocytes or selection of subsets of CD34+ cells with reduced allo-stimulatory ability may reduce graft rejection.