Cord blood has been used successfully for stem cell transplantation in several haematological conditions: Fanconi's anaemia, leukaemia and Wiskott-Aldrich syndrome. On account of the low incidence of GVHD observed following cord blood transplantation, it has been suggested that cord blood be used for HLA-matched, or perhaps one or two antigens mismatched, and unrelated stem cell transplantation. Based on an extensive immunophenotype-functional correlation, we determined that cord blood contains mainly immature unprimed T lymphocytes that are predominantly suppressor cells. Recent findings suggest that dysregulated production of cytokines (IL-1, IL-2, TNF alpha) plays a role in GVHD. We showed that T cells in cord blood express receptors for IL-2, TNF alpha, but no receptors for IL-1. Similarly, NK cells, one of the effector cells of GVHD, express receptors for TNF alpha and gamma IFN but do not express receptors for IL-1, nor IL-2R alpha-chain (CD25) although IL-2R beta-chain is expressed. The potential for activation of T lymphocytes and NK cells therefore exists in the context of bone marrow transplantation. However, the high number of suppressor cells in cord blood most likely modulate the activation of lymphocytes and NK cells thereby minimizing GVHD.