Cyclophosphamide's lack of hematopoietic stem cell toxicity and its unique effects on the immune system have prompted several investigators to explore its potential for the prevention of graft-versus-host disease (GVHD). In haploidentical hematopoietic stem cell transplants, post-transplant cyclophosphamide together with standard prophylaxis reduces the incidence of GVHD to acceptable rates without the need for T cell depletion. In matched related and unrelated donor settings, cyclophosphamide alone has produced encouraging results. In particular, the low incidence of chronic GVHD is noteworthy. Here, we present a review of the current understanding of the mechanism of action of post-transplant cyclophosphamide and summarize the clinical data on its use for the prevention of GVHD.