Infantile ceramidase deficiency (Farber disease) is an uncommon, progressive lysosomal storage disease characterized by multiple ceramide-containing nodules (lipogranulomata) in the subcutaneous tissue and upper aerodigestive tract, painful periarticular swelling, psychomotor retardation, and varying degrees of ocular, pulmonary or hepatic involvement. Management of Farber disease has been limited to symptomatic supportive care, and few affected infants survive beyond 5 years of age. We performed an allogeneic bone marrow transplant (BMT) from an HLA-identical heterozygous sister in a 9.5-month-old female with minimally symptomatic Farber disease who received a pre-transplant regimen of busulfan and cyclophosphamide. Ceramidase activity in peripheral blood leukocytes increased from 6% before transplant to 44% (donor heterozygote level) by 6 weeks after BMT. By 2 months after transplant, the patient's subcutaneous lipogranulomata, pain on joint motion, and hoarseness had resolved. Despite modest gains in cognitive and language development, hypotonia and delayed motor skills persisted. Gradual loss of circulating donor cells with autologous hematopoietic recovery occurred; VNTR analyses showed 50% donor DNA in peripheral blood cells at 8.5 months after BMT and only 1% at 21 months after transplant. Interestingly, leukocyte ceramidase activity consistently remained in the heterozygous range despite attrition of donor cells in peripheral blood. This novel observation indicates ongoing hydrolase production by non-circulating donor cells, possibly in the mononuclear phagocytic system, and uptake by recipient leukocytes. Although lipogranulomata and hoarseness did not recur, the patient's neurological and neurocognitive status progressively declined. She died 28 months after BMT (age 37.5 months) with pulmonary insufficiency caused by recurrent aspiration pneumonias. Allogeneic BMT improves the peripheral manifestations of infantile ceramidase deficiency, but may not prevent the progressive neurological deterioration, even when carried out in minimally symptomatic patients.