Allogeneic hematopoietic stem cell transplantation (allo-HSCT) is a curative treatment for hematological malignancy due to graft-versus-leukemia (GVL) effects, mediated by alloreactive donor T cells. However, these same donor cells cause graft-versus-host disease (GVHD), a life-threatening complication. During GVHD, donor T cells proliferate, migrate, and produce cytokines, leading to damage of healthy host tissues. Separating the linked processes of GVHD and GVL is critical to improving outcomes. Here we show that TCF-1, a major T cell developmental factor, plays a role in regulation of these processes. Using a mouse model of allo-HSCT leading to GVHD, we found that conditional loss of TCF-1 in mature CD8 T cells separates GVHD from GVL, providing an optimal clinical phenotype. This occurred due to changes in cytokine production, proliferation, cell survival, chemokine receptor expression, and gene expression. Thus, modulation of TCF-1 signaling reduces GVHD severity and persistence, but maintains GVL effects, and could be useful for allo-HSCT or other T cell-mediated disorders. Furthermore, here and in our companion manuscript we show that regulation of mature, alloactivated T cells by TCF-1 differs between CD4 and CD8 T cells, suggesting that TCF-1 is critical for regulation of mature alloactivated T cells, with unique programs in each subset.