Chronic graft-versus-host disease (cGVHD) causes significant morbidity and mortality in patients after allogeneic bone marrow (BM) or stem cell transplantation (allo-SCT). Recent work has indicated that both T and B lymphocytes play an important role in the pathophysiology of cGVHD. Previously, our group showed a critical role for the germinal center response in the function of B cells using a bronchiolitis obliterans (BO) model of cGVHD. Here, we demonstrated for the first time that cGVHD is associated with severe defects in the generation of BM B lymphoid and uncommitted common lymphoid progenitor cells. We found an increase in the number of donor CD4⁺ T cells in the BM of mice with cGVHD that was negatively correlated with B-cell development and the frequency of osteoblasts and Prrx-1–expressing perivascular stromal cells, which are present in the B-cell niche. Use of anti-DR3 monoclonal antibodies to enhance the number of donor regulatory T cells (T_regs) in the donor T-cell inoculum ameliorated the pathology associated with BO in this model. This correlated with an increased number of endosteal osteoblastic cells and significantly improved the generation of B-cell precursors in the BM after allo-SCT. Our work indicates that donor T_regs play a critical role in preserving the generation of B-cell precursors in the BM after allo-SCT. Approaches to enhance the number and/or function of donor T_regs that do not enhance conventional T-cell activity may be important to decrease the incidence and severity of cGVHD in part through normal B-cell lymphopoiesis.