Haematopoietic stem cell transplantation (HSCT) offers promise for the treatment of haematological and immune disorders, solid tumours, and as a tolerance inducing regimen for organ transplantation. Allogeneic HSCTs engraftment requires immunosuppression and the anti-tumour effects are dependent upon the immune effector cells that are contained within or generated from the donor graft. However, significant toxicities currently limit its efficacy. These problems include: (i) graft-versus-host disease (GVHD) in which donor T cells attack the recipient resulting in multi-organ attack and morbidity, (ii) a profound period of immune deficiency following HSCT, and (iii) donor graft rejection. Currently available methods to prevent or treat GVHD with systemic immunosuppression can lead to impaired immune recovery, increased opportunistic infections, and higher relapse rates. This review will provide an overview of GVHD pathophysiology and discuss the roles of various cells, pathways, and factors in the GVHD generation process and in the preservation of graft-versus-tumour effects. Variables that need to be taken into consideration in attempting to extrapolate preclinical results to the clinical paradigm will be highlighted.