Background Primary sclerosing cholangitis (PSC) is an indication for liver transplantation, but recurrence after liver transplantation is associated with poor outcomes often requiring repeat transplantation. We investigated whether autologous hematopoietic stem cell transplantation (aHSCT) could be used to stop progression of recurrent PSC and promote operational tolerance. Methods Twelve patients with recurrent PSC were fully evaluated and 5 were selected for aHSCT. Autologous hematopoietic stem cells were collected, purified by CD34 immunomagnetic selection and cryopreserved. Immunoablation using busulfan, cyclophosphamide and rabbit anti-thymocyte globulin was followed by aHSCT. The primary endpoint of the study was the establishment of operational tolerance defined as lack of biochemical, histologic and clinical evidence of rejection while off immunosuppression at 2 years post-aHSCT. Results Two of the 5 patients achieved operational tolerance with no clinical or histological evidence of PSC progression or allo-rejection. A third patient developed sinusoidal obstruction syndrome following aHSCT requiring repeat liver transplantation but has no evidence of PSC recurrence while on sirolimus monotherapy now more than 3 years after aHSCT. A fourth patient was weaned off immunosuppression but died 212 days after aHSCT from pericardial constriction. A fifth patient died from multiorgan failure. Immunosuppression-free allograft acceptance was associated with deletion of T cell clones, loss of autoantibodies and increases in regulatory T cells, transitional B cells, and programmed cell death protein-1 expressing CD8+ T cells in the 2 long-term survivors. Conclusions Although operational tolerance occurred following aHSCT, the high morbidity and mortality observed renders this specific protocol unsuitable for clinical adoption.