Treatment of autoimmune disease with bone marrow transplantation (BMT) is under investigation. A few reports of patients undergoing allogeneic BMT for malignant conditions observed the resolution of psoriasis after BMT, with minimal late morbidity. We describe a patient with chronic myelogenous leukemia (CML) whose psoriasis resolved completely after allogeneic BMT. However, the patient's course was complicated by extensive chronic graft-versus-host disease (GVHD), recurrent serious infections, poor performance status and quality of life, and severe disability. The patient died 887 days post transplant due to infectious complications. The potential benefits and risks of treatment of autoimmune diseases with allogeneic BMT are discussed.