In murine models, mixed hematopoietic chimerism induction leads to robust immune tolerance. However, translation to primates and to patients has been difficult. In this study, we used a novel MHC-defined rhesus macaque model to examine the impact of MHC matching on the stability of costimulation blockade-/sirolimus-mediated chimerism, and to probe possible mechanisms of bone marrow rejection after nonmyeloablative transplant. Using busulfan-based pretransplant preparation and maintenance immunosuppression with sirolimus, as well as CD28 and CD154 blockade, all recipients demonstrated donor engraftment after transplant. However, the mixed chimerism that resulted was compartmentalized, with recipients demonstrating significantly higher whole blood chimerism compared to T cell chimerism. Thus, the vast majority of T cells presenting posttransplant were recipient—rather than donor-derived. Surprisingly, even in MHC-matched transplants, rejection of donor hematopoiesis predominated after immunosuppression withdrawal. Weaning of immunosuppression was associated with a surge of antigen-experienced T cells, and transplant rejection was associated with the acquisition of donor-directed T cell alloreactivity. These results suggest that a reservoir of alloreactive cells was present despite prior costimulation blockade and sirolimus, and that the postimmunosuppression lymphocytic rebound may have lead to a phenotypic shift in these recipient T cells towards an activated, antigen-experienced phenotype, and ultimately, to transplant rejection.