Background: Mouse models of human disease are invaluable for determining the differentiation ability and functional capacity of stem cells. The best example is bone marrow transplants for studies of hematopoietic stem cells. For organ studies, the interpretation of the data can be difficult as transdifferentiation, cell fusion or surface antigen transfer (trogocytosis) can be misinterpreted as differentiation. These events have not been investigated in hematopoietic stem cell transplant models. Methodology/Principal Findings: In this study we investigated fusion and trogocytosis involving blood cells during bone marrow transplantation using a xenograft model. We report that using a standard SCID repopulating assay almost 100% of the human donor cells appear as hybrid blood cells containing both mouse and human surface antigens. Conclusion/Significance: Hybrid cells are not the result of cell-cell fusion events but appear to be due to efficient surface antigen transfer, a process referred to as trogocytosis. Antigen transfer appears to be non-random and includes all donor cells regardless of sub-type. We also demonstrate that irradiation preconditioning enhances the frequency of hybrid cells and that trogocytosis is evident in non-blood cells in chimera mice.