There is little information published comparing peripheral blood stem cells (PBSC) with bone marrow (BM) as the stem cell source in the long-term outcome in recipients of T-cell depleted (TCD) unrelated donor (UD) transplants. We present retrospective outcome data on 306 recipients of myeloablative, human leucocyte antigen-matched UD allografts using pre-transplant in-vivo Alemtuzumab. Transplants were performed between 2000 and 2007 for chronic myeloid leukaemia in first chronic phase and acute leukaemia in first or second complete remission; 184 patients received BM and 122 PBSC. The median age was 28·9 years (<1–58) and the median follow-up was 48 months. Overall survival at 8 years was 53%. The incidence of acute graft-versus-host disease (GvHD) was significantly higher in PBSC (65%) than BM recipients (49%; P = 0·012). This represented only grade 1 GvHD with no difference in grade II–IV aGvHD (BM 23% PBSC 24%). The incidence of chronic GvHD, either overall (BM 47%, PBSC 49%) or extensive (BM 15%, PBSC 13%) was not increased with PBSC. The incidence of relapse, non-relapse mortality and survival were not significantly different. Whilst accepting the limitations of retrospective analyses, we suggest the increased risk of GvHD in recipients of PBSC in T-replete transplants is offset by in-vivo Alemtuzumab, and that either stem cell source can be used with good outcomes in this setting.