PCT No. PCT/US94/05844 Sec. 371 Date Jun. 6, 1995 Sec. 102(e) Date Jun. 6, 1995 PCT Filed May 24, 1994 PCT Pub. No. WO94/27622 PCT Pub. Date Dec. 8, 1993This invention provides a method for developing immune tolerance in xenogeneic organ graft recipients, in which lympho-hematopoietic cells from an intended organ graft recipient are differentiated within a xenogeneic surrogate, such as a fetal animal. After birth of the surrogate, the matured lympho-hematopoietic cells containing antigen specific regulatory cells, including suppressor cells, veto cells, select B cells, anti-idiotype antibodies, and other related factors responsible for antigen specific tolerance in a surrogate animal are reintroduced into the intended organ graft recipient, in conjunction with an organ transplant or a tissue transplant from the xenograft surrogate. The invention also provides an organ graft repopulated with cells from the intended organ graft recipient produced in a surrogate animal.