Idiopathic pneumonia syndrome (IPS) is a relatively common, frequently fatal clinical entity, characterized by noninfectious acute lung inflammation following allogeneic stem cell transplantation (SCT), the mechanisms of which are unclear. In this study, we demonstrate that immune suppression with cyclosporin after SCT limits T-helper cell (Th) 1 differentiation and interferon-γ secretion by donor T cells, which is critical for inhibiting interleukin (IL)-6 generation from lung parenchyma during an alloimmune response. Thereafter, local IL-6 secretion induces donor alloantigen-specific Th17 cells to preferentially expand within the lung, and blockade of IL-17A or transplantation of grafts lacking the IL-17 receptor prevents disease. Studies using IL-6-/- recipients or IL-6 blockade demonstrate that IL-6 is the critical driver of donor Th17 differentiation within the lung. Importantly, IL-6 is also dysregulated in patients undergoing clinical SCT and is present at very high levels in the plasma of patients with IPS compared with SCT recipients without complications. Furthermore, at the time of diagnosis, plasma IL-6 levels were higher in a subset of IPS patients who were nonresponsive to steroids and anti-tumor necrosis factor therapy. In sum, pulmonary-derived IL-6 promotes IPS via the induction of Th17 differentiation, and strategies that target these cytokines represent logical therapeutic approaches for IPS.