The development and maintenance of immune tolerance after allogeneic hematopoietic stem cell transplantation (HSCT) requires the balanced reconstitution of donor-derived CD4 regulatory T cells (CD4Tregs) as well as effector CD4 (conventional CD4 T cells [CD4Tcons]) and CD8 T cells. To characterize the complex mechanisms that lead to unbalanced recovery of these distinct T-cell populations, we studied 107 adult patients who received T-replete stem cell grafts after reduced-intensity conditioning. Immune reconstitution of CD4Treg, CD4Tcon, and CD8 T cells was monitored for a 2-year period. CD3 T-cell counts gradually recovered to normal levels during this period but CD8 T cells recovered more rapidly than either CD4Tregs or CD4Tcons. Reconstituting CD4Tregs and CD4Tcons were predominantly central memory (CM) and effector memory (EM) cells and CD8 T cells were predominantly terminal EM cells. Thymic generation of naive CD4Tcon and CD8 T cells was maintained but thymic production of CD4Tregs was markedly decreased with little recovery during the 2-year study. T-cell proliferation was skewed in favor of CM and EM CD4Tcon and CD8 T cells, especially 6 to 12 months after HSCT. Intracellular expression of BCL2 was increased in CD4Tcon and CD8 T cells in the first 3 to 6 months after HSCT. Early recovery of naive and CM fractions within each T-cell population 3 months after transplant was also strongly correlated with the subsequent development of chronic graft-versus-host disease (GVHD). These dynamic imbalances favor the production, expansion, and persistence of effector T cells over CD4Tregs and were associated with the development of chronic GVHD.