IL-17–producing cells are important mediators of graft-versus-host disease (GVHD) after allogeneic stem cell transplantation (SCT). Here we demonstrate that a distinct CD8⁺ Tc17 population develops rapidly after SCT but fails to maintain lineage fidelity such that they are unrecognizable in the absence of a fate reporter. Tc17 differentiation is dependent on alloantigen presentation by host dendritic cells (DCs) together with IL-6. Tc17 cells express high levels of multiple prototypic lineage-defining transcription factors (eg, RORγt, T-bet) and cytokines (eg, IL-17A, IL-22, interferon-γ, granulocyte macrophage colony-stimulating factor, IL-13). Targeted depletion of Tc17 early after transplant protects from lethal acute GVHD; however, Tc17 cells are noncytolytic and fail to mediate graft-versus-leukemia (GVL) effects. Thus, the Tc17 differentiation program during GVHD culminates in a highly plastic, hyperinflammatory, poorly cytolytic effector population, which we term “inflammatory iTc17” (iTc17). Because iTc17 cells mediate GVHD without contributing to GVL, therapeutic inhibition of iTc17 development in a clinical setting represents an attractive approach for separating GVHD and GVL.