Allogeneic haemopoietic stem cell transplantation was initially considered as a means of delivering supralethal doses of chemotherapy with or without total body irradiation for the treatment of malignancy. However, it has become clear that this mode of therapy does not eradicate the malignancy in many patients and its benefit is largely due to the immune mediated graft versus malignancy effect. This has led to development of alternative strategy to utilize a less intensive preparative regimen pre-transplantation that provides sufficient immunosuppression to achieve engraftment of an allogeneic stem cell graft, thus allowing the evolution of a graft versus malignancy effect post-transplantation. Since September 1999, we had carried out 10 cases of allogeneic peripheral blood stem cell transplantation: one case of aplastic anaemia, four cases of acute myeloid leukemia (AML) in first remission, and five cases of chronic myeloid leukemia (CML) in chronic phase. The preparative regimen was non-myeloablative comprising Fludarabine with Cyclophosphamide or Busulphan. Recovery from transplantation was rapid with no or brief period of neutropenia or thrombocytopenia. Engraftment was established by determining donor's short tandem repeats in the recipient's bone marrow at day 30, 60 and 100 post-transplantation. Seven cases (70%) show partial or complete donor's chimerism by day 30 indicating successful engraftment. No treatment mortality was noted at day 100. Graft versus host disease was generally limited. Up to the date of reporting, two patients with CML had graft failure, one was successfully re-transplanted later. Two patients with AML had since relapsed and passed away. The others remain alive and well. The cost of transplantation on average was estimated to be about a quarter of that using a myeloablative regimen. It appears that this treatment strategy is a promising approach for the management of blood disorders.