Etanercept is a recombinant human soluble tumor necrosis factor (TNF‐α) receptor fusion protein that inhibits TNF‐α, a major mediator in the pathogenesis of graft‐versus‐host disease (GVHD). The purpose of our study was to evaluate the safety and efficacy of etanercept therapy in 21 patients with steroid‐refractory acute GVHD (aGVHD) (n = 13) and chronic GVHD (cGVHD) (n = 8). Etanercept 25 mg was given subcutaneously twice weekly for 4 weeks followed by 25 mg weekly for 4 weeks. At the time of initiation of etanercept, 14 patients had skin, 13 had gastro‐intestinal, 5 had liver, 5 had pulmonary, and 4 had oral involvement. Twelve patients (57%) completed 12 doses of therapy. Overall, 11 of 21 patients (52%) responded to the treatment with etanercept, including 6 patients (46%) with aGVHD [n = 4 complete response (CR), n = 2 partial response (PR)] and 5 patients (62%) with cGVHD (n = 1 CR, n = 4 PR). Clinical responses were most commonly seen in patients with refractory gut aGVHD with 55% of the patients having a CR and 9% having a PR. CMV reactivation occurred in 48% of patients, bacterial infections in 14% of patients, and fungal infections in 19% of patients. Fourteen patients (67%) were alive after a median follow‐up of 429 days (range 71–1007 days) since initiation of etanercept. Seven patients died, 3 of infections, 2 of refractory aGVHD, and 2 of disease progression. In conclusion, our preliminary data indicate that etanercept is well tolerated and can induce a high response rate in patients with steroid‐refractory aGVHD and cGVHD, particularly in the setting of GI involvement. Am. J. Hematol., 2006. © 2006 Wiley‐Liss, Inc.