The therapeutic benefits of allogeneic stem cell transplantation in patients with hematologic disorders are limited by the significant morbidity and mortality of graft-versus-host disease (GVHD). Current agents for the prevention and treatment of GVHD have limited efficacy and often result in toxic side-effects. Mycophenolate mofetil (MMF) is a new immunosuppressant with a selective mechanism of action. When employed following solid organ transplantation, MMF reduces the incidence and severity of acute rejection episodes. By selectively targeting activated lymphocytes, the active metabolite of MMF, mycophenolic acid (MPA), appears to augment the actions of standard immunosuppressant agents without adding overlapping toxicities. Studies of combination regimens that include MMF report that this agent permits a dose reduction of cyclosporine, tacrolimus, or corticosteroid, without increasing the incidence of acute rejection in solid organ transplants. Reports on the efficacy of MMF following stem cell transplantation in animal studies were mixed. However, the use of a non-myeloablative conditioning regimen with a post-graft immunosuppressive regimen of MMF and cyclosporine was able to sustain stable mixed chimeras in 60% to 80% of dogs who received hematopoietic grafts from DLA-identical littermates. MMF has demonstrated activity in preliminary clinical trials for GVHD prophylaxis, and treatment of acute or chronic GVHD. Larger clinical trials are warranted to determine the optimum dose and route of MMF administration for GVHD, as well as the comparative safety and efficacy of MMF-containing regimens.