Reduced-intensity conditioning (RIC) permits allogeneic hematopoietic progenitor cell transplantation in patients who would not be considered candidates for transplantation using a myeloablative preparative regimen because of age, comorbidities or prior therapy. In the setting of myeloablative transplantation, use of antithymocyte globulin (ATG) can reduce the risk of GVHD without negatively affecting transplant outcomes; however, limited data exist on the impact of ATG in the setting of RIC, particularly when there is HLA-mismatch. We performed a retrospective analysis of 85 patients who received unrelated donor transplants at our institution for hematologic malignancies following conditioning with fludarabine and melphalan (FluMel), with or without rabbit ATG (6 mg/kg). ATG was targeted to patients receiving HLA-mismatched grafts. With a median follow-up of 36 months, those receiving ATG and a mismatched graft had similar rates of acute and chronic GVHD, relapse, and similar OS compared with those receiving HLA-matched grafts without ATG. In a multivariate analysis, HLA-mismatched donor was not associated with a decrement in OS. We conclude that this intermediate dose of ATG is effective in preventing severe GVHD in the setting of HLA-mismatch, without undue compromise of the graft versus tumor effects on which RIC transplants depend.