Purpose: Peripheral-blood stem cells (PBSC) may be used as an alternative to bone marrow (BM) for allogeneic transplantation. Despite lack of data on PBSC transplantation in children, there has been a change in clinical practice, with increasing numbers of children receiving PBSC allografts. Patients and Methods: We compared the results of 143 PBSC and 630 BM transplants from human leukocyte antigen-identical sibling donors in children aged 8 to 20 years with acute leukemia. PBSC transplant recipients were older, and were more likely to have advanced leukemia, receive growth factors post-transplantation, and have undergone transplantation more recently. Risks of acute and chronic graft-versus-host disease (GVHD), treatment-related mortality, relapse, treatment failure (relapse or death), and overall mortality were compared using Cox proportional hazards regression to adjust for potentially confounding factors. Results: Hematopoietic recovery was faster after PBSC transplantation. Risks of grade 2 to 4 acute GVHD were similar, but chronic GVHD risk was higher after PBSC transplantation (relative risk [RR], 1.85; 95% CI, 1.28 to 2.66; P = .001). In contrast to reports in adults, treatment-related mortality (RR, 1.89; 95% CI, 1.28 to 2.80; P = .001), treatment failure (RR, 1.31; 95% CI, 1.03 to 1.68; P = .03), and mortality (RR, 1.38; 95% CI, 1.07 to 1.79; P = .01) were higher after PBSC transplantation. Risks of relapse were similar. Conclusion: These data suggest poorer outcomes after PBSC compared with BM transplantation in children after adjusting for relevant risk factors. Given the trend toward increased use of PBSC allografts in children, prospective clinical trials are required to determine their appropriate role in this group of patients.