Chronic graft-versus-host disease (cGVHD) causes significant morbidity and mortality in patients otherwise cured of malignancy after hematopoietic stem cell transplantation (HSCT). The presence of alloantibodies and high plasma B cell-activating factor (BAFF) levels in patients with cGVHD suggest that B cells play a role in disease pathogenesis. We performed detailed phenotypic and functional analyses of peripheral B cells in 82 patients after HSCT. Patients with cGVHD had significantly higher BAFF/B-cell ratios compared with patients without cGVHD or healthy donors. In cGVHD, increasing BAFF concentrations correlated with increased numbers of circulating pre-germinal center (GC) B cells and post-GC "plasmablast-like" cells, suggesting in vivo BAFF dependence of these 2 CD27(+) B-cell subsets. Circulating CD27(+) B cells in cGVHD comprised in vivo activated B cells capable of IgG production without requiring additional antigen stimulation. Serial studies revealed that patients who subsequently developed cGVHD had delayed reconstitution of naive B cells despite persistent BAFF elevation as well as proportional increase in CD27(+) B cells in the first year after HSCT. These studies delineate specific abnormalities of B-cell homeostasis in patients with cGVHD and suggest that BAFF targeting agents may be useful in this disease.