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The immunogenicity of murine pancreatic islets can be reduced by culture in 95% O2 prior to transplantation. Such cultured tissue can reverse diabetes indefinitely in nonimmunosuppressed, allogeneic recipients. Although the cultured graft does not trigger a rejection response, the graft retains recognizable alloantigens in that the graft is acutely rejected when the host is immunized with donor-type antigen-presenting cells. However, over time the recipients bearing cultured islet allografts become increasingly resistant to rejecting the established graft following APC challenge. Data show that this process of graft “stabilization” is a function of time postgrafting and initial graft mass. Graft stabilization is not due to a change in the vulnerability of the graft to immune recognition—that is, stabilization cannot be accounted for by the spontaneous adaptation of the long-term graft. Rather, graft stabilization is associated with a change in host reactivity (tolerance induction). This conclusion is based on the findings that (1) recipients of long-term established grafts (>120 days) resist rejection of both the primary and secondary donor-type grafts, and (2) donor-specific tolerance can be transferred to severe-combined- immune-deficient (scid) recipient mice.