Abstract Allogeneic hematopoietic stem cell transplantation (HSCT) has evolved into an effective adoptive cellular immunotherapy for the treatment of a number of cancers. The immunobiology of allogeneic HSCT is unique in transplantation in that it involves potential immune recognition and attack between both donor and host. Much of the immunobiology of allogeneic HSCT has been gleaned from preclinical models and correlation with clinical observations. We review our current understanding of some of the issues that affect the success of this therapy, including host-versus-graft (HVG) reactions, graft-versus-host disease (GVHD), graft-versus-tumor (GVT) activity, and restoration of functional immunity to prevent transplant-related opportunistic infections. We also review new strategies to optimize the GVT and improve overall immune function while reducing GVHD and graft rejection.