One reason bone marrow transplant (BMT) and peripheral blood stem cell transplantation (PBSCT) are used in cancer treatment is to make it possible for patients to receive very high doses of chemotherapy and/or radiation therapy. To understand more about why BMT and PBSCT are used, it is helpful to understand how chemotherapy and radiation therapy work.
Chemotherapy and radiation therapy generally affect cells that divide rapidly. They are used to treat cancer because cancer cells divide more often than most healthy cells. However, because bone marrow cells also divide frequently, high-dose treatments can severely damage or destroy the patient's bone marrow. Without healthy bone marrow, the patient is no longer able to make the blood cells needed to carry oxygen, fight infection, and prevent bleeding. BMT and PBSCT replace stem cells destroyed by treatment. The healthy, transplanted stem cells can restore the bone marrow's ability to produce the blood cells the patient needs.
In some types of leukemia, the graft-versus-tumor (GVT) effect that occurs after allogeneic BMT and PBSCT is crucial to the effectiveness of the treatment. GVT occurs when white blood cells from the donor (the graft) identify the cancer cells that remain in the patient's body after the chemotherapy and/or radiation therapy (the tumor) as foreign and attack them. (A potential complication of allogeneic transplants called graft-versus-host disease.)
This answer is based on source information from the National Cancer Institute.