Graft-versus-host disease (GVHD) is a major cause of morbidity and mortality after bone marrow transplantation (BMT). CD4⁺CD25⁺ immune regulatory T cells (Tregs), long recognized for their critical role in induction and maintenance of self-tolerance and prevention of autoimmunity, are also important in the regulation of immune responses in allogeneic bone marrow (BM) and solid organ transplantation. Published data indicate that ex vivo activated and expanded donor Tregs result in significant inhibition of lethal GVHD. This study provides a direct comparison of LSel^hi and LSel^lo Tregs for GVHD inhibition and for the promotion of allogeneic BM engraftment. Imaging of green fluorescent protein–positive effectors in GVHD control mice and LSel^hi and LSel^lo Treg-treated mice vividly illustrate the multisystemic nature of GVHD and the profound inhibition of GVHD by LSel^hi Tregs. Data indicate that LSel^hi Tregs interfere with the activation and expansion of GVHD effector T cells in secondary lymphoid organs early after BMT. Either donor- or host-type LSel^hi, but not LSel^lo, Tregs potently increased donor BM engraftment in sublethally irradiated mice, an event occurring independently of transforming growth factor β signaling of host T cells. These data indicate that Treg cellular therapy warrants clinical consideration for the inhibition of GVHD and the promotion of alloengraftment.