The success of allogeneic hematopoietic cell transplantation depends heavily on the delicate balance between the activity of the donor immune system against malignant and nonmalignant cells of the recipient. Abrogation of alloreactivity will lead to disease relapse, whereas untamed allo-immune responses will lead to lethal graft-versus-host disease (GVHD). A number of cell types have been identified that can be used to suppress alloreactive immune cells and prevent lethal GVHD in mice. Of those, mesenchymal stromal cells and, to a lesser extent, regulatory T cells have demonstrated efficacy in humans. Ideally, cellular therapy for GVHD will not affect alloreactive immune responses against tumor cells. The importance of tissue damage in the pathophysiology of GVHD rationalizes the development of cells that support tissue homeostasis and repair, such as innate lymphoid cells. We discuss recent developments in the field of cellular therapy to prevent and treat acute and chronic GVHD, in the context of GVHD pathophysiology.