Graft-versus-host disease (GvHD) mediated by donor T cells recognizing host alloantigens is associated with beneficial graft-versus-tumor effects in recipients of allogeneic hematopoietic cell transplants. Since leukemias and lymphomas reside largely within the lymphohematopoietic system, we have proposed that the desired graft-versus-leukemia or graft-versus-lymphoma effect can be separated from the complication of GvHD by confinement of the graft-versus-host alloresponse to the lymphohematopoietic tissues. Since the new sphingosine-1-phosphate receptor agonist immunosuppressive drug FTY720 leads to trapping of T cells in secondary lymphoid tissues, we evaluated the possibility that this drug could diminish GvHD, a disease involving epithelial target tissues, while permitting a beneficial alloresponse to take place within the lymphohematopoietic system, leading to graft-versus-lymphoma effects. We demonstrate here that FTY720 markedly reduces GvHD in a clinically relevant, haploidentical strain combination, while permitting antitumor effects against a T cell lymphoma of unshared host MHC haplotype to proceed unhindered. These results establish a potential new immunotherapeutic approach to separating graft-versus-leukemia effects from GvHD.