Graft-versus-host disease (GVHD) remains the major barrier to the success of allogeneic hematopoietic stem cell transplantation (HSCT). GVHD is caused by donor T cells that mediate host tissue injury through multiple inflammatory mechanisms. Blockade of individual effector molecules has limited efficacy in controlling GVHD. Here, we report that Notch signaling is a potent regulator of T-cell activation, differentiation, and function during acute GVHD. Inhibition of canonical Notch signaling in donor T cells markedly reduced GVHD severity and mortality in mouse models of allogeneic HSCT. Although Notch-deprived T cells proliferated and expanded in response to alloantigens in vivo, their ability to produce interleukin-2 and inflammatory cytokines was defective, and both CD4(+) and CD8(+) T cells failed to up-regulate selected effector molecules. Notch inhibition decreased the accumulation of alloreactive T cells in the intestine, a key GVHD target organ. However, Notch-deprived alloreactive CD4(+) T cells retained significant cytotoxic potential and antileukemic activity, leading to improved overall survival of the recipients. These results identify Notch as a novel essential regulator of pathogenic CD4(+) T-cell responses during acute GVHD and suggest that Notch signaling in T cells should be investigated as a therapeutic target after allogeneic HSCT.