Donor T cells mediate both graft-versus-leukemia (GVL) activity and graft-versus-host disease (GVHD) after allogeneic hematopoietic cell transplantation (Allo-HCT). Development of methods that preserve GVL activity while preventing GVHD remains a long-sought goal. Tolerogenic anti-IL-2 monoclonal antibody (mAb) (JES6-1) forms anti-IL-2/IL-2 complexes that block IL-2 binding to IL-2Rb and IL-2Rg on Tcon cells that have low expression of IL-2Rα. Here we show that administration of JES6 early after Allo-HCT in mice markedly attenuates acute GVHD while preserving GVL activity that is dramatically stronger than observed with tacrolimus (TAC) treatment. The anti-IL-2 treatment down-regulated activation of IL-2-Stat5 pathway and reduced production of GM-CSF. In GVHD target tissues, enhanced T cell PD-1 interaction with tissue-PD-L1 led to reduced activation of AKT-mTOR pathway and increased expression of Eomes and Blimp-1, increased T cell anergy/exhaustion, expansion of Foxp3-IL-10-producing Tr1 cells, and depletion of GM-CSF-producing Th1/Tc1 cells. In recipient lymphoid tissues, lack of donor T cell PD-1 interaction with tissue-PD-L1 preserved donor PD-1+TCF-1+Ly108+CD8+ T memory progenitors (Tmp) and functional effectors that have strong GVL activity. Anti-IL-2 and TAC treatments have qualitatively distinct effects on donor T cells in the lymphoid tissues, and CD8+ Tmp cells are enriched with the anti-IL-2 treatment compared to TAC treatment. We conclude that administration of tolerogenic anti-IL-2 mAb early after Allo-HCT represents a novel approach for preventing acute GVHD while preserving GVL activity.