Allogeneic stem cell transplantation is a form of immunotherapy that has increased the chances of survival for patients with relapsed leukemia and high risk leukemia in remission. The major obstacles are graft-vs-host disease (GVHD) involving vital organs and infections. A most efficacious prophylaxis of GVHD is by depleting of T cells from the graft. However, problems of T-depleted transplants are rejection, slow recovery of the immune system and high incidence of relapse of leukemia and myeloma. The major problem of allogeneic transplantation is the separation of a graft-vs-leukemia (GVL) effect from GVHD. This review will summarize the factors influencing GVHD, ways to exploit rapid advances in our knowledge of histocompatibility, chimerism and tolerance for fostering GVL over GVHD, and in particular the use of cellular therapies including donor lymphocyte infusions for disease control.