Bone marrow transplantation in childhood is an established treatment modality for aplastic anemia, the acute and chronic leukemias, and severe combined immune deficiency. Recently, experience with this treatment has also been favorable with small numbers of children who have Wiskott-Aldrich syndrome, several types of inherited storage diseases, Fanconi's anemia, thalassemia, infantile malignant osteopetrosis, and selected cases of lymphoma and other solid tumors. The psychosocial impact and financial costs of bone marrow transplantation can be substantial. Multi-institutional, prospective, randomized trials that would compare transplantation and conventional therapy are necessary to establish the indications and precise timing for this procedure. Further development of monoclonal antibodies, a better understanding of the histocompatibility antigen systems, and improvement in pretransplantation conditioning regimens should increase the spectrum of effectiveness for bone marrow transplantation in the coming years.