The number of allogeneic hematopoietic cell transplantations (HCT) continues to increase with more than 20000 allogeneic transplantations performed annually. The graft-versus-leukemia / tumor (GVL) effect during allogeneic HCT effectively eradicates many hematological malignancies. The development of novel strategies that use donor leukocyte infusions (DLI), nonmyeloablative conditioning and umbilical cord blood transplantation (UCB) have helped expand the indications for allogeneic HCT over the last several years, especially among older patients. Yet the major complication of allogeneic HCT, graft-versus-host disease (GVHD), remains lethal and limits its wider application. In this article we review current and recent advances made in understanding the complex and intricate pathophysiology of acute GVHD. GVH reaction is a consequence of interactions between the donor and host and their innate and adaptive immune responses. The fundamental interaction for induction of GVHD is the interaction of donor T cells with APCs and that this interaction is regulated positively or negatively by a plethora of cytokines, chemokines, and several immune cell subsets. In this article we review current and recent advances made in understanding of the cross-talk between these multiple cells and inflammatory molecules that have been implicated in the biology of GVHD.