Intrathymic immune modulation with RT1.Aa allopeptides in the PVG.R8-to-PVG.1 U rat strain combination leads to long-term survival of cardiac allografts. This regimen, however, does not induce transplantation tolerance, since most long-surviving allografts undergo chronic rejection. We investigated recipients with chronic rejection for donor-specific immune nonresponsiveness and immunoregulatory cells as possible mechanisms responsible for long-term graft survival. There was a significant reduction in the proliferative response of T cells from long-term allograft recipients to donor alloantigens as compared with that of naïve T cells. Adoptive transfer of splenocytes from intrathymically manipulated primary long-term graft survivors into minimally irradiated secondary hosts resulted in indefinite survival of > 80% of allografts, providing evidence for immunoregulatory cells. Secondary recipients had total absence of donor-reactive cellular and humoral responses. Immunoregulation was also transferable from secondary to tertiary graft recipients. More importantly, there was a significant reduction in the incidence of chronic rejection in secondary hosts (> 85%) and complete prevention of acute and chronic rejection in tertiary hosts. This study demonstrates that intrathymic immunomodulation with class I allopeptides results in the generation of immunoregulatory cells that do not block chronic rejection in primary hosts where they develop, but prevent both acute and chronic allograft rejection when adoptively transferred into secondary and tertiary recipients.