Patients receiving hematopoietic stem cell transplantation or bone marrow transplantation (BMT) as therapy for various malignancies or autoimmune diseases have an increased risk for infectious complications posttransplant, especially in the lung. We have used BMT in mice and murine gammaherpesvirus, γHV-68, to study the efficacy of adaptive immune responses post-BMT. Five weeks posttransplant, mice have fully reconstituted their hematopoietic lineages in both the lung and periphery. When challenged with virus, however, BMT mice have a reduced ability to clear lytic virus from the lung. Defective viral control in BMT mice is not related to impaired leukocyte recruitment or defective APC function. Rather, BMT mice are characterized by defective CD4 cell proliferation, skewing of effector CD4 T cells from a Th1 to a Th17 phenotype, and an immunosuppressive lung environment at the time of infection that includes overexpression of TGF-β1 and PGE 2 and increased numbers of regulatory T cells. Neither indomethacin treatment to block PG synthesis nor anti-CD25 depletion of regulatory T cells improved antiviral host defense post-BMT. Transplanting mice with transgenic bone marrow expressing a dominant-negative TGF-βRII under the permissive CD4 promoter created mice in which effector CD4 and CD8 cells were unresponsive to TGF-β1. Mice with TGF-β1–nonresponsive effector T cells had restored antiviral immunity and improved Th1 responses post-BMT. Thus, our results indicate that overexpression of TGF-β1 following myeloablative conditioning post-BMT results in impaired effector T cell responses to viral infection.