The impact of reduced‐intensity conditioning (RIC) on the outcomes of hematopoietic cell transplantation (HCT) from unrelated ‐donors (UD) remains to be determined. We therefore assessed 128 patients, aged 16 to 66 years, with acute leukemia (n = 105) or myelodysplastic syndrome (n = 23) in a UD‐HCT trial using RIC with busulfan, fludarabine, and antithymocyte globulin. Patients were transplanted with unmanipulated bone marrow (BM, n = 41) or mobilized peripheral blood mononuclear cells (M‐PB, n = 87) and received cyclosporine and methotrexate for graft‐versus‐host disease (GVHD) prophylaxis. After a median follow‐up of 26.7 months (range, 5.9−70.7 months) in surviving patients, 19 patients had died without progression/recurrence of underlying disease, giving a cumulative incidence of transplantation‐related mortality (TRM) of 17% (95% confidence interval, 11%–27%; 1‐year TRM, 14%). Graft failure (n = 7) and infections (n = 5) were the most common causes of TRM. Only three patients died due to GVHD (acute, one; chronic, two). Graft failure, which occurred in eight patients, showed a significant correlation with graft source (BM, 6/41 vs. M‐PB, 2/87; P = 0.009). Donor‐patient HLA‐disparity did not correlate with GVHD, 1‐year TRM, and graft failure. RIC containing antithymocyte globulin led to decreased GVHD‐associated, as well as overall, TRM after UD‐HCT. This trial is registered at http://www.clinicaltrials.gov as NCT00627666. Am. J. Hematol. 86:399–405,2011. © 2011 Wiley‐Liss, Inc.