The potential of haemopoietic stem cell transplantation (HSCT) for the treatment of autoimmune and inflammatory diseases was originally supported by almost three decades of animal experiments and by the serendipitous remissions of autoimmune disease observed in patients undergoing transplantation for haematological disorders. Improved safety of both autologous and allogeneic HSCT over the last decade has been followed by increasing acceptance of HSCT as an experimental treatment for severe autoimmune diseases that are resistant to conventional treatment. International databases have collated over 700 procedures performed specifically for a variety of autoimmune diseases. Phase III clinical trials are in progress for some diseases. This review provides a comprehensive update on the efficacy and toxicity of HSCT in severe autoimmune disease. Future directions in the context of other evolving therapies are discussed.