The goal of the study was to determine how the changed balance of host naïve and regulatory T cells observed after conditioning with total lymphoid irradiation (TLI) and antithymocyte serum (ATS) promotes tolerance to combined organ and bone marrow transplants. Although previous studies showed that tolerance was dependent on host natural killer T (NKT) cells, this study shows that there is an additional dependence on host CD4+CD25+ Treg cells. Depletion of the latter cells before conditioning resulted in rapid rejection of bone marrow and organ allografts. The balance of T-cell subsets changed after TLI and ATS with TLI favoring mainly NKT cells and ATS favoring mainly Treg cells. Combined modalities reduced the conventional naïve CD4+ T cells 2800-fold. The host type Treg cells that persisted in the stable chimeras had the capacity to suppress alloreactivity to both donor and third party cells in the mixed leukocyte reaction. In conclusion, tolerance induction after conditioning in this model depends upon the ability of naturally occurring regulatory NKT and Treg cells to suppress the residual alloreactive T cells that are capable of rejecting grafts.