Graft-versus-host disease (GVHD) is a major complication following allogenetic hematopoietic stem cell transplantation, which shows a great threat to patients' survival and life quality. Along with multiple differentiation potential to various types of progenitor cells, bone marrow mesenchymal stem cells (BMMSC) have been confirmed to possess low immunogenicity and exert favorable immunomodulation. The recent studies show that the safety and high efficiency of BMMSC to prevent and cure GVHD greatly improved survival rate of the hosts. The most recent progress on prevention and therapy of GVHD is summarized in this review based on biology of BMMSC and pathogenesis of GVHD, so as to provide the effective evidence for further research.