Acute graft-versus-host disease (GVHD) is a life-threatening complication after allogeneic hematopoietic cell transplantation (allo-HCT). While currently used GVHD treatment regimens target the donor immune system, we explored here an approach that aims at protecting and regenerating Paneth cells (PC) and intestinal stem cells (ISC). Glucagon-like-peptide-2 (GLP-2) is an enteroendocrine tissue hormone, produced by intestinal L-cells. We observed that acute GVHD reduced intestinal GLP-2 levels in mice and patients developing GVHD. Treatment with the GLP-2 agonist, teduglutide, reduced de novo acute GVHD and steroid-refractory GVHD, without compromising graft-versus-leukemia (GVL) effects in multiple mouse models. Mechanistically GLP-2 substitution promoted regeneration of PCs and ISCs which enhanced production of antimicrobial peptides and caused microbiome changes. GLP-2 expanded intestinal organoids and reduced expression of apoptosis-related genes. Low numbers of L-cells in intestinal biopsies and high serum levels of GLP-2 were associated with higher incidence of non-relapse mortality in patients undergoing allo-HCT. Our findings indicate that L-cells are a target of GVHD and that GLP-2-based treatment of acute GVHD restores intestinal homeostasis via an increase of ISCs and PCs without impairing GVL effects. Teduglutide could become a novel combination partner for immunosuppressive GVHD therapy to be tested in clinical trials.