Transplantation of normal, immature, fetal hematopoietic cells into a preimmune fetal recipient with a congenital hemoglobinopathy may allow partial reconstitution of normal hemoglobin production without the complications associated with postnatal bone marrow transplantation (immunosuppression and the occurrence of graft versus host disease). In order to test this hypothesis the naturally occurring polymorphism at the beta-hemoglobin locus of the sheep was used as a marker for engraftment and hematopoietic chimerism. Intraperitoneal injection of allogeneic fetal stem cells into normal fetal lambs resulted in hematopoietic chimerism in three of four surviving recipients. This chimerism has been sustained for 6 months after birth and 9 months after engraftment, without evidence of graft versus host disease, and without the use of immunosuppressive therapy.