Chronic graft-versus-host disease (cGVHD) is a major cause of late mortality following allogeneic bone marrow transplantation (BMT) and is characterized by tissue fibrosis manifesting as scleroderma and bronchiolitis obliterans. The development of acute GVHD (aGVHD) is a powerful clinical predictor of subsequent cGVHD, suggesting that aGVHD may invoke the immunologic pathways responsible for cGVHD. In preclinical models in which sclerodermatous cGVHD develops after a preceding period of mild aGVHD, we show that antigen presentation within major histocompatibility complex (MHC) class II of donor dendritic cells (DCs) is markedly impaired early after BMT. This is associated with a failure of regulatory T-cell (Treg) homeostasis and cGVHD. Donor DC-restricted deletion of MHC class II phenocopied this Treg deficiency and cGVHD. Moreover, specific depletion of donor Tregs after BMT also induced cGVHD, whereas adoptive transfer of Tregs ameliorated it. These data demonstrate that the defect in Treg homeostasis seen in cGVHD is a causative lesion and is downstream of defective antigen presentation within MHC class II that is induced by aGVHD.