Disrupted hematopoiesis and delayed immune reconstitution are life-threatening complications of allogeneic hematopoietic stem cell transplantation (allo-HSCT). Although graft-versus-host disease (GVHD) is a major risk factor for the bone marrow (BM) insufficiency, how GVHD impairs BM hematopoiesis has been largely unknown. We hypothesized that BM stromal niche could be a target of GVHD. In major histocompatibility complex (MHC)-mismatched murine models of GVHD, we have demonstrated the early destruction of osteoblasts that especially affected B-cell lineages. The defective B lymphopoiesis was due to the impaired ability of BM stroma and osteoblasts to support the hematopoiesis, as evidenced by the failure of GVHD-affected BM to reconstitute the hematopoietic cells. The administration of anti-CD4 monoclonal antibody (mAb) ameliorated these effects and improved B lymphopoiesis while preserving graft-versus-tumor effects. Genetic ablation of Fas-Fas ligand signaling also partially restored B lymphopoiesis. Our present study provided evidence of BM GVHD, with the identification of osteoblasts as the main target for GVHD in BM. Moreover, our data showed the potential for mAb therapies to enhance immune reconstitution in vivo for patients undergoing allo-HSCT.