Although allogeneic bone marrow (BM) transplantation is an effective way to induce donor-specific tolerance, its clinical application is hampered because of the risk associated with vigorous myeloablative pretransplant conditioning. One approach to overcome this problem is to establish a lower chimeric state by mild myeloablation. It is not clear, however, whether there is a threshold in the extent of chimerism that is required for tolerance induction. In this study, we establish a mixed BM chimera system to examine the correlation between the reconstitution ratio of BM chimerism, donor-reactive T cell deletion, and skin graft acceptance using I-E alpha transgenic C57BL/6 mice as the BM and skin graft donors and Ly5 congenic C57BL/6 mice as the recipients. In this system, the class II MHC molecule I-E was the transplantation Ag, and the extent of I-E-reactive T cell deletion was determined by flow cytometry using a mAb specific for the V beta 11 TCR. The degree of BM chimerism was measured by examining the expression of donor-derived Ly5.2 and host-derived Ly5.1 on peripheral blood cells. Transplantation of I-E+ transgenic donor BM cells resulted in deletion of V beta 11+CD4+ T cells in recipient's PBL, and the extent of deletion was proportional to the degree of chimerism. When mice of different degrees of chimerism were tested for skin graft survival, we found that recipient mice with > 30% chimerism could accept skin grafts from I-E+ donor mice, whereas those with < 10% chimerism showed prolonged but not permanent graft survival. These findings revealed the sequence of events for induction of tolerance. First, the degree of BM chimerism determines the number of I-E+ cells in the thymus, which then elicits negative selection of I-E-reactive T cells in a form of clonal deletion. The extent of T cell deletion ultimately determines the mode of tolerance. These data provide experimental evidence for the potential use of partial chimerism by bone marrow transplantation for the induction of donor-specific tolerance in clinical settings.