We conducted a prospective multicenter study to compare the efficacy of repeated immunosuppressive therapy (IST) with stem-cell transplantation (SCT) from an alternative donor in children with acquired aplastic anemia (AA) who failed to respond to an initial course of IST. Patients with severe (n = 86) and very severe disease (n = 119) received initial IST consisting of antithymocyte globulin (ATG) and cyclosporine. Sixty patients failed to respond to IST after 6 months from the initial IST and were eligible for second-line treatment. Among them, 21 patients lacking suitable donors received a second course of IST. Three patients developed an anaphylactoid reaction to ATG and could not complete the second IST. A trilineage response was seen in only 2 of 18 (11%) evaluable patients after 6 months. Thirty-one patients received SCT from an alternative donor. At 5 years from the initiation of second-line therapy, the estimated failure-free survival (FFS), defined as survival with response, was 83.9% (+/- 16.1%, SD) in the SCT group compared with 9.5% (+/- 9.0%) in the IST group (P = .001). These results suggest that SCT from an alternative donor offers a better chance of FFS than a second IST in patients not responding to an initial IST.