Objective: Cloned placenta immunoregulatory ferritin (PLIF) contains a novel, nonferritin bioactive domain (C-48) with immunodulatory activity. We documented that treatment of whole human bone marrow cells with PLIF and its subcloned C48 proteins resulted in myeloid progenitor cell growth and differentiation and T-cell suppression via an effect on the cytokine network. We tested whether this differential effect supports allogeneic bone marrow transplantation with long-lasting tolerance without any further treatments. Materials and Methods: Splenocyte-enriched C3H (H2k) whole bone marrow was transplanted into C57Bl (H2b) recipients after total body irradiation. Recipients were injected with recombinant C48 (3mg/kg, intraperitoneal) for 21 days or with glutathione S-transferase. Animals were monitored for survival, chimerism, and clinical signs of graft-vs-host disease (GVHD). Next, chimera whole bone marrow was transplanted to secondary myeloablated C57Bl (H2b) hosts without treatment. Results: Mice that received C48 treatment following allogeneic splenocyte-enriched bone marrow transplantation demonstrated full-donor chimerism without GVHD mortality, and normal blood cell counts in 75% of recipients. Secondary transplants from the full chimera to myeloblated C57Bl hosts showed 100% engraftment, no GVHD mortality, and no impairment in the long-term hematopoietic reconstitution potential. Allogeneic response of spleen cells from secondary chimeras against donor C3H (H2k) and recipient C57Bl (H2b) were similar to syngeneic response, whereas reactivity to third party (DBA H2d) was significantly enhanced. Conclusions: Findings of this study provide the proof of concept that C48-a novel, single, bifunctional therapeutic modality enabled successful allogeneic, unmanipulated bone marrow transplantation without GVHD, and with lasting specific tolerance.