Invariant natural killer T cells (iNKT cells) have pivotal roles in graft-versus-host disease (GVHD) and graft-versus-leukemia (GVL) effects. iNKT cells are activated through their T-cell receptors by glycolipid moieties (typically the α-galactosylceramide [α-GalCer] derivative KRN7000) presented within CD1d. We investigated the ability of modified α-GalCer molecules to differentially modulate alloreactivity and GVL. KRN7000 and the N-acyl variant, C20:2, were administered in multiple well-established murine models of allogeneic stem cell transplantation. The highly potent and specific activation of all type I NKT cells with C20:2 failed to exacerbate and in most settings inhibited GVHD late after transplantation, whereas effects on GVL were variable. In contrast, the administration of KRN7000 induced hyperacute GVHD and early mortality in all models tested. Administration of KRN7000, but not C20:2, was found to result in downstream interleukin (IL)-12 and dendritic cell (DC)–dependent natural killer (NK)– and conventional T-cell activation. Specific depletion of host DCs, IL-12, or donor NK cells prevented this pathogenic response and the induction of hyperacute GVHD. These data demonstrate the ability of profound iNKT activation to modulate both the innate and adaptive immune response via the DC–NK-cell interaction and raise concern for the use of α-GalCer therapeutically to modulate GVHD and GVL effects.