Daclizumab, a humanized monoclonal antibody, binds CD25 and blocks formation of the IL-2 receptor on T cells. A study of daclizumab as acute graft-versus-host disease (GVHD) prophylaxis after unrelated bone marrow transplantation was conducted before the importance of CD25+FOXP3+ regulatory T cells (Tregs) was recognized. Tregs can abrogate the onset of GVHD. The relation between Tregs and a graft-versus-malignancy effect is not fully understood. An international, multicenter, double-blind clinical trial randomized 210 adult or pediatric patients to receive 5 weekly doses of daclizumab at 0.3 mg/kg (n = 69) or 1.2 mg/kg (n = 76) or placebo (n = 65) after unrelated marrow transplantation for treatment of hematologic malignancies or severe aplastic anemia. The risk of acute GVHD did not differ among the groups (P = .68). Long-term follow-up of clinical outcomes and correlative analysis of peripheral blood T cell phenotype suggested that the patients treated with daclizumab had an increased risk of chronic GVHD (hazard ratio [HR], 1.49; 95% confidence interval [CI], 1.0 to 2.3; P = .08) and a decreased risk of relapse (HR, 0.57; 95% CI, 0.3 to 1.0; P = .05), but similar survival (HR, 0.89; 95% CI, 0.6 to 1.3; P = .53). T cells from a subset of patients (n = 107) were analyzed by flow cytometry. Compared with placebo, treatment with daclizumab decreased the proportion of Tregs among CD4 T cells at days 11-35 and increased the proportion of central memory cells among CD4 T cells at 1 year. Prophylactic administration of daclizumab does not prevent acute GVHD, but may increase the risk of chronic GVHD and decrease the risk of relapse. By delaying Treg reconstitution and promoting immunologic memory, anti-CD25 therapy may augment alloreactivity and antitumor immunity.