Graft‐versus‐host disease (GvHD) is a frequent life‐threatening complication following allogeneic HSC transplantation (HSCT). IL‐10 is a regulatory cytokine with important roles during GvHD, yet its relevant sources, and mode of action, remain incompletely defined in this disease. Using IL‐10‐deficient donor or host mice (BALB/c or C57BL/6, respectively) in a MHC‐mismatched model for acute GvHD, we found a strongly aggravated course of the disease with increased mortality when either donor or host cells could not produce this cytokine. A lack of IL‐10 resulted in increased allogeneic T‐cell responses and enhanced activation of host DCs in spleen and MLNs. Remarkably, IL‐10 was prominently produced by host‐ and donor‐derived CD5^intCD1d^intTIM‐1^int B cells in this disease, and consistent with this, allogeneic HSCT resulted in exacerbated GvHD when mice lacking IL‐10 expression in B cells were used as donor or host, compared with controls. Taken together, this study demonstrates that host and donor B cell‐derived IL‐10 provides a unique mechanism of suppression of acute GvHD, and suggests that DCs are the targets of this B cell‐mediated suppressive effect. These findings open novel therapeutic possibilities based on the use of B cells to increase the feasibility of allogeneic HSCT.