The critical role played by Fas ligand (FasL) in immune homeostasis renders this molecule an attractive target for immunomodulation to achieve tolerance to auto- and transplantation Ags. Immunomodulation with genetically modified cells expressing FasL was shown to induce tolerance to alloantigens. However, genetic modification of primary cells in a rapid, efficient, and clinically applicable manner proved challenging. Therefore, we tested the efficacy of donor splenocytes rapidly and efficiently engineered to display on their surface a chimeric form of FasL protein (SA-FasL) for tolerance induction to cardiac allografts. The i.p. injection of ACI rats with Wistar-Furth rat splenocytes displaying SA-FasL on their surface resulted in tolerance to donor, but not F344 third-party cardiac allografts. Tolerance was associated with apoptosis of donor reactive T effector cells and induction/expansion of CD4(+)CD25(+)FoxP3(+) T regulatory (Treg) cells. Treg cells played a critical role in the observed tolerance as adoptive transfer of sorted Treg cells from long-term graft recipients into naive unmanipulated ACI rats resulted in indefinite survival of secondary Wistar-Furth grafts. Immunomodulation with allogeneic cells rapidly and efficiently engineered to display on their surface SA-FasL protein provides an effective and clinically applicable means of cell-based therapy with potential application to regenerative medicine, transplantation, and autoimmunity.