Over the last three decades, autologous hematopoietic stem cell transplantation (AHSCT) has emerged as a significant therapeutic strategy for patients with various refractory autoimmune diseases. Globally, more than 3000 AHSCT procedures have been performed for severe autoimmune diseases. The rationale behind this treatment is abrogation of autoreactivity; renovation of the immune system from the infused hematopoietic stem cells and establishment of a balanced, long-lasting, and self-tolerant immune system. Thymic rebound is a central event in the mechanisms of action of transplantation, promoting the generation of a new repertoire of T cells and reinstating self-tolerance. Here, we critically review the immunological mechanisms of AHSCT in various autoimmune disease settings, with a central focus on thymic rejuvenation. We understand that elucidating the mechanisms of action of the transplant and conducting immunological monitoring studies are crucial for comprehending the risks, benefits, and long-term efficacy of the treatment, thereby promoting functional improvements in patients with autoimmune diseases refractory to conventional treatment.