Bone marrow transplantation for lysosomal storage disorders has been used for the past 25 years. The early allure of a promising new therapy has given way to more realistic expectations, as it has become clear that bone marrow transplantation is not a cure, but merely ameliorates the clinical phenotype. The results in some disorders are more acceptable than in others. Significant challenges have emerged, particularly the poor mesenchymal and neurological responses. Important recent advances in lysosomal biology, both in health and disease, have helped us to better understand the results of bone marrow transplantation, and to rationalize its role in the treatment of lysosomal storage disorders alongside newer therapies. At the same time, they have helped researchers to explore new therapeutic applications of bone marrow cells, such as gene and stem cell therapy.