The aryl hydrocarbon receptor (AhR) is a ligand-activated transcription factor that affects the function and development of immune cells. Here, we show that recipient mice receiving AhR T cells have improved survival and decreased acute graft-versus-host disease (aGVHD) in 2 different murine allogeneic bone marrow transplant (BMT) models. We also show that CD4 T cells lacking AhR demonstrate reduced accumulation in secondary lymphoid tissue because of low levels of proliferation 4 days after BMT. Additionally, we found a significant increase in the quantity of peripherally induced regulatory donor T (pT) cells in the colon of recipients transplanted with AhR T cells 14 days after transplant. Blockade of AhR using a clinically available AhR antagonist greatly enhanced the in vitro generation of inducible T (iT) cells from naïve CD4 human T cells. We have identified AhR as a novel target on donor T cells that is critical to the pathogenesis of aGVHD.