Acute graft-versus-host disease (GVHD) is one of the major life-threating complications after allogeneic cell transplantation (allo-HCT). Although steroids remain first-line treatment, roughly one half of patients will develop steroid refractory GVHD (SR-GVHD) which portends an extremely poor prognosis. Many agents, which have shown encouraging response rates in early phase I/II trials for prevention and treatment, have been unsuccessful in demonstrating a survival advantage when applied in the setting of SR-GVHD. The discovery of novel treatments has been further complicated by the absence of clinically informative animal models that address what may reflect a distinct pathophysiology. Nonetheless, the combined knowledge of established bone marrow transplantation (BMT) models and recent human trials in SR-GVHD patients are beginning to illuminate novel mechanisms for inhibiting T cell signaling and promoting tissue tolerance that provide an increased understanding of the underlying biology of SR-GVHD. Here we discuss recent findings of newly appreciated cellular and molecular mechanisms and provide novel translational opportunities for advancing the effectiveness of treatment in SR-GVHD.