To understand the role of myeloid differentiation factor 88 (MyD88) expressed by donor bone marrow (BM) in the pathophysiology of graft-vs.-host disease (GVHD), we investigated the effects of transplantation of MyD88-deficient T cell-depleted BM (MyD88KO TCD-BM) on the severity of GVHD. Transplantation with MyD88KO TCD-BM aggravated GVHD; serious gut damage was evident, with high infiltration of T cells into the intestines of recipients and markedly reduced expansion of CD11b(+)Gr-1(+) myeloid-derived suppressor cells (MDSCs). MDSCs from MyD88KO mice were defective in inducing donor T-cell apoptosis and inhibiting T-cell proliferation. Supplementation of transplanted mice with MDSCs from wild-type mice, but not MyD88KO mice, attenuated GVHD severity with reduced intestinal T-cell infiltration in MyD88KO TCD-BM recipients. Pretreatment of BM donors with lipopolysaccharide to increase MDSC levels and MyD88 transcription in the TCD-BM transplant alleviated GVHD severity and intestinal T-cell infiltration. The T cell/MDSC ratios were correlated with intestinal GVHD severity in both animal models and human patients. This study indicates that MyD88-dependent MDSC expansion from donor BM is critical for protection against fatal intestinal GVHD.