We studied the safety and clinical outcomes of patients treated with umbilical cord blood (UCB)-derived regulatory T cells (Tregs) that expanded in cultures stimulated with K562 cells modified to express the high-affinity Fc receptor (CD64) and CD86, the natural ligand of CD28 (KT64/86). Eleven patients were treated with Treg doses from 3-100 × 10⁶ Treg/kg. The median proportion of CD4⁺FoxP3⁺CD127^– in the infused product was 87% (range, 78%-95%), and we observed no dose-limiting infusional adverse events. Clinical outcomes were compared with contemporary controls (n = 22) who received the same conditioning regimen with sirolimus and mycophenolate mofetil immune suppression. The incidence of grade II-IV acute graft-versus-host disease (GVHD) at 100 days was 9% (95% confidence interval [CI], 0-25) vs 45% (95% CI, 24-67) in controls (P = .05). Chronic GVHD at 1 year was zero in Tregs and 14% in controls. Hematopoietic recovery and chimerism, cumulative density of infections, nonrelapse mortality, relapse, and disease-free survival were similar in the Treg recipients and controls. KT64/86-expanded UCB Tregs were safe and resulted in low risk of acute GVHD.