An immune basis for most patients with aplastic anemia (AA) provides a rationale for immunosuppressive therapy (IST), using antithmyocyte globulin and cyclosporine as one therapeutic modality; hematologic response is observed in up to 75% of patients. Recent advances in understanding the pathogenesis of AA have identified defective telomere maintenance as an important explanation for the onset of marrow failure, relapse and clonal evolution after IST, in some patients with AA. The finding of inherited mutations in the telomerase gene complex in patients with apparent acquired AA has important implications for clinical management. Hematopoietic stem cell transplantation (HSCT) for acquired AA, whether from an HLA identical sibling or an unrelated donor, provides an excellent chance of long term cure. Current issues with HSCT include graft rejection, chronic GVHD and poor outcome in older patients. The lack of a suitable bone marrow donor for all patients who need a transplant, illustrates the need for novel transplant procedures, such as cord blood transplantation.