Clinical trials with bone marrow depleted of donor T lymphocytes indicate that both the incidence and severity of graft-versus-host disease (GVHD) in patients undergoing bone marrow transplantation (BMT) for treatment of leukemia are greatly reduced. However, there has been a concurrent increase in the incidence of graft rejection, particularly among recipients of HLA-nonidentical marrow grafts. In order to investigate the nature of graft failure, peripheral blood mononuclear cells (PBMC) present at the time of graft failure have been characterized by phenotypic and functional analyses in 5 recipients of HLA-nonidentical marrow grafts. Rejection of HLA-nonidentical marrow grafts was associated with the emergence of host-derived T lymphocytes in all 5 patients. In 3 of these patients, the cells could be tested directly for cell-mediated cytotoxicity. Antidonor cytotoxicity was detected in each of these 3 patients. In one patient the target specificity of the cytotoxic lymphocytes was identified as the donor class I HLA antigen, HLA-B7. None of the patient PBMC mediated cytotoxicity against the natural killer cell target K562.