Allogeneic HSCT is the only curative intervention for patients with persistent disease or who recur after transplantation; however, these patients are often not considered for HSCT because of their persistent disease or high risk for regimen-related toxicity. We conducted a prospective study for patients who had hematologic malignancies with refractory disease or who relapsed after allogeneic HSCT using mismatched family member donors and a reduced intensity conditioning regimen in an effort to allow GVHD to occur to reduce disease recurrence in this high risk patient population. The conditioning regimen consisted of fludarabine (40 mg/m2/day for 5 days), melphalan (60 mg/m2/day for 2 days), and thiotepa (10 mg/kg/day for one day). One dose of melphalan was omitted in 6 patients who were aplastic at the time of transplantation. OKT3 was administered from day −9 to +17 for prevention of graft rejection. GVHD prophylaxis consisted of MMF initiated on day −2. Rituximab 375 mg/m2 was administered on day 0 as EBV prophylaxis. Patients received G-CSF starting on day +6 until ANC ≥ 2000/mm3 for two consecutive days. Peripheral blood grafts were obtained after mobilization with G-CSF and GM-CSF. Grafts were depleted of T-lymphocytes on the CliniMACS device using the anti-CD3 antibody OKT3. 25 patients were treated in this manner: 10 with refractory disease and 15 requiring another allogeneic HSCT (14 had one prior HSCT, one had 2 prior HSCT). For refractory patients, diagnoses included AML (2 secondary AML, 1 persistent disease (PD)) JMML (n=1, PD), ALL (n=3, PD), and NHL (n=3, PD including one after autologous HSCT). For patients who had failed prior allogeneic HSCT, diagnoses included AML (n=7), ALL (n=7), and CML (n=1, blast crisis). Patients had failed HSCT from matched sibling donors (n=5), unrelated donors (n=5), unrelated cord blood grafts (n=2), and haploidentical parents (n=3). Patients were a median of 11 years old at HSCT (range, 1–26). The median number of CD34+cells/kg infused was 13.64 x 106/kg (range, 2.23–42.46); the median number of CD3+ cells/kg infused was 0.122 x 106/kg (range, 0.006–0.45). Two patients suffered primary graft rejection: one with refractory JMML recovered with persistent disease after OKT3 and a re-infusion of paternal PBSCs. The second underwent infusion of the original unrelated donor cells and engrafted. The 23 evaluable patients had a median time to ANC ≥ 500/mm3 of 10 days (range, 7–12) post-HSCT. One patient undergoing second HSCT developed secondary graft rejection requiring infusion of original sibling donor marrow. 13 patients developed acute GVHD, but only 2 developed grade 3–4 acute GVHD. 5 patients developed chronic GVHD. None developed VOD. Of the refractory patients, 7 died of relapse and 1 of regimen-related toxicity. Of those undergoing subsequent HSCT, 6 died of relapse and 2 of regimen-related toxicity. With a median followup of 472 days, (range, 147–767), 9 remain alive. Transplantation of mismatched related donor PBSC grafts using OKT3 for ex vivo T-cell depletion following a reduced intensity conditioning regimen produces favorable outcomes with acceptable toxicity in this this high-risk patient population.