Conditions allowing the development of a stable state of hematopoietic chimerism, i.e., the coexistence of foreign and recipient hematopoietic cells in the same individual, remain the most effective means to produce immune tolerance to antigens expressed by foreign cells/grafts. However, heavy immunosuppression is required to achieve chimerism and as such has limited clinical application. MHC antigens being the primary targets of immune responses, we pioneered an innovative approach in which foreign MHC genes were first introduced in bone marrow cells of recipients of subsequent grafts expressing the same MHC antigens. This strategy produced MHC class I (MHC I) or class II (MHC II) molecular chimerism, did not require heavy conditioning, and enabled long-term transplant acceptance in rodents as well as large animals. However, recent developments have indicated, that although the outcomes of gene transfer were similar, the mechanism of tolerance induction by MHC I and MHC II gene transfer were markedly different. This review examines the tolerance mechanism arising after MHC gene transfer to infer that MHC II gene therapy is clinically more relevant since the transfer of a single gene enables broad tolerance to all graft antigens via the production of MHC II peptides for selective activation of regulatory T cells (T-regs).