Clinical experience and animal models have shown that donor T cell depletion (TCD) adversely affects engraftment of hematopoietic stem cells (HSCs). Although it is known that donor T cells are acting to overcome residual host immune barriers, they may also exert effects independent of host resistance via direct or indirect interactions with donor stem cells, their microenvironment, or key differentiation events. To more precisely define the effect of T cells on engraftment, we have performed human umbilical cord blood (UCB) transplantation into immunodeficient mice under limiting dilution conditions. UCB mononuclear cells (MNC) or TCD UCB were transplanted into NOD/LtSz-scid/scid B2m^null (NOD/SCID-β₂m^−/−) mice. Cohorts of mice received UCB MNC or TCD UCB at 5 dose levels between 5 × 10⁴ and 5 × 10⁶ cells. At dose levels at or above 10⁵ cells, engraftment was higher in the MNC recipients (n = 32) than the TCD recipients (n = 31) in a dose-dependent manner. Despite this difference, limiting dilution analysis to determine functional stem cell frequency revealed that SCID repopulating cells in TCD UCB was not significantly less than in CB MNCs, suggesting that T cells may facilitate engraftment at stages beyond the stem cell. Add-back of CD3/CD28 costimulated T cells restored and appeared to enhance engraftment, both in NOD/SCID-β₂m^−/− as well as NOD/LtSz-scid IL2Rγ^null (NOG) recipients. These results, in a model where there are minimal host immune barriers to overcome, suggest T cells possess additional graft-facilitating properties. CD3/CD28 costimulation of UCB T cells represents a potential strategy for enhancing the engraftment of UCB.