Blood transfusion therapy is associated with many risks, including major or minor blood transfusion reaction, non-A non-B hepatitis, hepatitis B, and HIV infection. Blood transfusion may result in immunologic changes (immunomodulation) that are beneficial in some patients but harmful in others. After reports of increased renal allograft survival in patients receiving pretransplant transfusion, Gantt questioned whether transfusion might diminish or retard the immune response. Clinical studies have shown a beneficial effect of blood transfusion on graft survival, but an adverse effect on cancer recurrence and postoperative infection. Approximately two thirds of 11,000 transfusions given perioperatively are administered by anesthesiologists, and 26% are given inappropriately. This review will focus on the immunomodulatory effects of transfusion therapy. It will begin with a brief review of the immune system and then discuss 1) the effect of transfusion therapy on modulating the immune system, and 2) transfusion-induced immunomodulatory effects on vascularized graft survival, cancer recurrence, and postoperative infections. (DBO)