(C57BL/6 × DBA/2)F₁‐hybrid mice injected with lymphoid cells from wild‐type, C57BL/6 donors develop acute, lethal graft‐versus‐host disease (GVHD) in which the intestine is a major target. In its destructive phase intestinal GVHD is characterized by apoptosis of intestinal crypt epithelial cells and the development of endotoxaemia. Injection of as little as 10 μg endotoxin is lethal in mice with acute GVHD, and associated with the release of large amounts of tumour necrosis factor‐α (TNF‐α) into the serum. To explore the role of interferon‐γ (IFN‐γ) in the pathogenesis of intestinal GVHD we used IFN‐γ gene knockout (gko) mice as donors. Recipients of grafts from these donors did not develop intestinal GVHD and, unlike recipients of wild‐type grafts, did not die when injected with lipopolysaccharide (LPS). We also found that injection 10 μg LPS into recipients of wild‐type grafts induced apoptosis of intestinal epithelial crypt cells and was associated with a burst of nitric oxide production in the intestine. Administration of N^ωnitro l‐arginine methyl ester blocked this response. In contrast, LPS did not induce either intestinal epithelial cell apoptosis or increased nitric oxide production in recipients of IFN‐γ gko grafts. These findings indicate that donor‐derived IFN‐γ is instrumental for the development of intestinal GVHD. In a previous study we showed that recipients of IFN‐γ gko grafts develop high levels of LPS‐induced TNF‐α release. When our current data are viewed in the context of this observation, they suggest that intestinal epithelial cell apoptosis in the parent→F₁‐hybrid model of acute GVHD is mediated primarily by nitric oxide rather than TNF‐α, and that this depends on donor‐derived IFN‐γ.