We retrospectively evaluated the outcome of reduced-intensity conditioning (RIC) followed by allogeneic hematopoietic stem cell transplantation (HCT) in 43 patients with myelodysplastic syndrome (MDS) or AML arising from MDS. All patients received fludarabine plus melphalan followed by an allogeneic HCT from an HLA-identical sibling (SIB: n = 19) or unrelated donor (MUD: n = 24). Median age was 58 years (range: 30 = 71). Diagnoses at transplantation were RA (n = 8), RARS (n = 1), RAEB (n = 13), RAEB-T (n = 6), or AML arising from MDS (n = 15). Of 28 patients with MDS, two patients had low, 10 had intermediate-1, nine had intermediate-2 and seven had high-risk MDS by IPSS criteria. All patients initially engrafted with the median neutrophil recovery of 15 days (range: 9 = 27). The 2-year overall survival, disease-free survival, relapse and transplant-related mortality were 53.5% (CI 45.2-61.1), 51.2% (CI 43.3-58.5), 16.35 (CI 7.9-30.7) and 35.2% (26.4-45.7), respectively. Grade II-IV acute graft-versus-host disease occurred in 27 (63%) patients. There was no significant survival difference between SIB and MUD-HCT, but the relapse rate was higher among SIB donor recipients when compared to MUD (38.5 versus 7%, P = 0.02). RIC with fludarabine plus melphalan was associated with durable disease control and acceptable toxicity in this high-risk cohort.