This report describes the final results of a Phase II clinical trial investigating the efficacy of rabbit antithymocyte globulin (rATG), ciclosporin, steroids, and granulocyte colony-stimulating factor (GCSF) in patients with untreated aplastic anaemia (AA), or low to intermediate-risk and hypocellular myelodysplastic syndrome (MDS). We treated 24 patients each with AA and MDS with rATG (3.5 mg/kg/d x 5; reduced to 2.5 mg/kg/d x 5 in patients with MDS =55 years), ciclosporin (5 mg/kg orally daily x 6 months), steroids (1 mg/kg daily, tapered off over 1 month), and GCSF. The overall response rate in AA patients was 64% compared to 25% in MDS patients. The median time to response was 3 months in AA patients and 4 months in MDS patients. Pretreatment clinical characteristics, such as age, sex, blood counts, cellularity, cytogenetics, or HLA-DR15 status, did not predict for response. Response to therapy, however, predicted for improved overall survival (OS), with a 3-year OS of 89% vs. 43% in responders versus non-responders, respectively (P < 0.001). Infusion reactions occurred in about half the patients and were manageable. Myelosuppression, elevation in liver enzymes, and infections were common. The early mortality in MDS patients was 13% vs. 0% in AA patients.