PG27, an active fraction purified from an extract of a Chinese herb,Tripterygium wilfordii hook f, was used to prevent graft-versus-host disease (GVHD) in a murine model. Lethally irradiated BALB/c (H-2^d) recipients of B10.D2 (H-2^d) donor grafts were given daily intraperitoneal injections of PG27 (40 mg/kg per day) for the first 35 days after transplantation. Control mice were given daily injections of solvent vehicle (Ethanol and Cremophor EL). All the control recipients (15/15) died of GVHD within 90 days, but all the recipients given prophylactic treatment with PG27 (15/15) survived beyond 100 days without any signs of GVHD. Furthermore, the GVHD-free recipients were used as donors, and their bone marrow and spleen cells were transplanted into lethally irradiated normal BALB/c (same party) or lethally irradiated normal C3H (H-2^k, third party) mice. Although 10 of 10 same-party recipients survived more than 100 days without any signs of GVHD, 10 of 10 third-party C3H recipients died of GVHD within 40 days. Further studies of PG27 in the murine BCL1 leukemia/lymphoma model demonstrated that animals treated with PG27 partially retained the graft-versus-leukemia (GVL) effect of the graft without GVHD. These results suggest that treatment with PG27 induces host-specific tolerance and retains the GVL effect of allogeneic marrow grafts.