IL-10 is a key immune-regulatory cytokine, and its gene polymorphisms correlate with severity of clinical GVHD. IL-10 is made by a variety of donor and host cells, but the functional relevance of its source and its role in the biology of acute GVHD are not well understood. We used preclinical models to examine the relevance of IL-10^−/− in donor and host cellular subsets on the severity of GVHD. IL-10^−/− in host tissues or in the donor grafts did not alter donor Teff-mediated severity of GVHD. Furthermore, neither host-derived nor donor Teff-derived IL-10 was required for regulation of GVHD by WT CD4⁺CD25⁺ donor Tregs. By contrast, Treg-derived IL-10, although not obligatory, was necessary for optimal reduction of GVHD by mature donor Tregs. Importantly, IL-10 from donor BM grafts was also critical for optimal donor Treg-mediated suppression of GVHD. Together, these data suggest that IL-10 does not contribute to the induction of GVHD severity by the Teffs. However, donor BM graft and Treg-derived IL-10 are important for donor Treg-mediated suppression of GVHD.