Composite tissue transplantation is an emerging new era in transplant medicine and has become a viable reconstructive option for patients with large and devastating tissue defects. Advances in microsurgical techniques, transplant immunology and the development of potent immunosuppressive agents have enabled the realization of such types of transplants. Over the past decade, a rapidly growing number of face and upper extremity transplantations have been performed worldwide with highly encouraging outcomes. However, despite the fact that surgical, immunological and functional results are highly encouraging, the need for long-term and high-dose immunosuppression to enable graft survival and to treat/reverse acute skin rejection episodes remains a pace-limiting obstacle towards wide spread application. In this chapter we review the history and development of this novel field, the functional and immunological outcomes based on the world experience, unique biological features of such transplants, mechanisms and treatment protocols for acute skin rejection, as well as novel concepts for immune modulation and tolerance induction.