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Understanding the mechanisms that sustain immunological nonreactivity is essential for maintaining tissue in syngeneic and allogeneic settings, such as transplantation and pregnancy tolerance. While most transplantation rejections occur due to the adaptive immune response, the proinflammatory response of innate immunity is necessary for the activation of adaptive immunity. <i>Botryllus schlosseri</i>, a colonial tunicate, which is the nearest invertebrate group to the vertebrates, is devoid of T- and B-cell-based adaptive immunity. It has unique characteristics that make it a valuable model system for studying innate immunity mechanisms: (i) a natural allogeneic transplantation phenomenon that results in either fusion or rejection; (ii) whole animal regeneration and noninflammatory resorption on a weekly basis; (iii) allogeneic resorption which is comparable to human chronic rejection. Recent studies in <i>B. schlosseri</i> have led to the recognition of a molecular and cellular framework underlying the innate immunity loss of tolerance to allogeneic tissues. Additionally, <i>B. schlosseri</i> was developed as a model for studying hematopoietic stem cell (HSC) transplantation, and it provides further insights into the similarities between the HSC niches of human and <i>B. schlosseri</i>. In this review, we discuss why studying the molecular and cellular pathways that direct successful innate immune tolerance in <i>B. schlosseri</i> can provide novel insights into and potential modulations of these immune processes in humans.