Allogeneic stem cell transplantation (SCT) represents a curative treatment option for patients with leukemia and lymphoma. T lymphocytes contained in the allograft mediate a graft-versus-leukemia (GVL) effect and prevent graft rejection; however, T cells also initiate graft-versus-host disease (GVHD). Identification of T cell populations which mediate a GVL effect and prevent rejection with reduced GVHD will likely improve transplantation outcome. T cells exist in four functionally-defined populations, the CD4+, Th1/Th2 and CD8+, Tc1/Tc2 subsets. Th1-type CD4 cells primarily secrete type I cytokines (IL-2 and IFN-gamma), whereas Th2 cells secrete type II cytokines (IL-4, IL-5, and IL-10). Similarly, the CD8+ Tc1 and Tc2 cells differentially secrete the type I and type II cytokines, respectively. In addition to cytokine secretion, Tc1 and Tc2 populations mediate cytolytic effects, with Tc1 cells utilizing both perforin- and fas-based killing pathways, whereas Tc2 cells primarily utilize perforin-mediated cytolysis. In murine transplantation models of graft rejection, GVHD, and GVL effects, we have evaluated such functional T cell subsets for their ability to differentially mediate and regulate transplantation responses. These studies demonstrate that donor Th2 cells do not initiate acute GVHD, and can regulate the GVHD mediated by unmanipulated donor T cells without impairing alloengraftment. Additional experiments have shown that allospecific donor Tc2 cells result in reduced GVHD, and mediate a significant GVL effect. Thirdly, we have demonstrated that non-host reactive Tc2 cells with veto-like activity can potently abrogate marrow rejection independent of GVHD. Together, these results demonstrate that functionally-defined donor Th2 and Tc2 populations play an important role in the regulation of GVHD, the prevention of graft rejection, and the mediation of GVL effects, and suggest that utilization of Th2 and Tc2 cells in clinical allogeneic SCT may have potential for improving treatment outcome.