Allogeneic umbilical cord blood (UCB) transplantation is an established alternative to unrelated bone marrow or peripheral blood transplantation for treatment of high-risk hematologic disorders. There is growing evidence that non-myeloablative bone marrow conditioning can be used to facilitate engraftment of UCB-derived stem cells. Use of non-myeloablative conditioning reduces the risk of treatment-related mortality but increases the risk for relapse of the underlying hematologic condition. Disease status at the time of transplantation and potency of the graft versus tumor effect are important predictors of a successful outcome. It is for these reasons that non-myeloablative conditioning is best suited for patients felt to be at increased risk for treatment-related complications, and whose underlying disease is under good control. The optimal non-myeloablative conditioning regimen has yet to be determined. Further studies are needed to determine if non-myeloablative UCB transplantation can be successfully applied to pediatric patients and patients without prior exposure to cytotoxic chemotherapy.