Type I diabetes is a systemic autoimmune disease. Although transplantation of pancreatic tissues restores glucose homeostasis, grafts are affected by acute and chronic rejection as well as re-occurrence of autoimmune destruction. One newly recognized promising strategy to interrupt these detrimental processes is hematopoietic chimerism induced by bone marrow transplantation (BMT). The application of hematopoietic chimerism has three domains in the treatment of Type I diabetes mellitus: (1) tolerance induction to pancreas or pancreatic islet grafts; (2) prevention of the re-occurrence of autoimmune processes in the graft; (3) prevention of the onset of overt diabetes once the pre-diabetic state is clearly identified. Unfortunately, conventional BMT is associated with significant morbidity and mortality due to graft-versus-host disease (GVHD), failure of engraftment and lethal conditioning. The risk of these complications cannot be justified in the treatment of non-malignant diseases including Type I diabetes. This chapter will outline potential strategies to achieve hematopoietic chimerism without the risk of deadly complications. With these strategies, it may be possible to apply hematopoietic chimerism in the treatment of Type I diabetes, both to induce tolerance to islet allografts as well as to intervene and interrupt the autoimmune process in its early stages.