The number of allogeneic hematopoietic cell transplantations (HCT) continues to increase. More than 15,000 allogeneic transplantations are performed annually. The graft-versus-leukemia/tumor effect during allogeneic HCT effectively eradicates many hematological malignancies. The development of novel strategies that use donor leukocyte infusions, nonmyeloablative conditioning and umbilical cord blood transplantation have helped expand the indications for allogeneic HCT over the past several years, especially among older patients. Yet the major complication of allogeneic HCT, graft-versus-host disease, remains lethal and limits wider application of allogeneic HCT. In this article, we review current practice and recent advances made in prevention and treatment of graft-versus-host disease.