Graft versus host disease (GVHD) remains the major obstacle to successful allogeneic bone marrow transplantation. Cyclosporin with methotrexate is the most common prophylactic regimen. Tacrolimus is associated with less GVHD and is gaining ground especially in unrelated donor transplants where current regimens are unsatisfactory. Mycophenolate mofetil (MMF) and rapamycin have not yet shown benefit in acute GVHD prophylaxis. In vivo T-cell depletion with Campath 1H or thymoglobulin used during transplant conditioning are increasingly used in place of ex vivo T-cell depletion, where results remain disappointing. Steroids remain first choice for therapy of GVHD but anti-CD25 antibodies, daclizumab or basiliximab are gaining popularity as second-line therapy ahead of ATG. Chronic GVHD is increasing with greater use of peripheral blood stem cell grafts and older patients. The combination of tacrolimus and MMF is promising for patients with extensive disease. Tolerance induction using CTLA-4-Ig, anti-CD40L, tresperimus and/or rapamycin may revolutionise GVHD therapy. However, due to the desirability of tumour intolerance, tolerance is likely to be developed in organ transplantation before bone marrow transplantation for traditional indications. Bone marrow transplants performed to induce organ tolerance may see increasing use of these agents. TNF blockade using infliximab or etanercept (Enbrel) is promising but the role of these agents is not yet defined.