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Interleukin-38 (IL-38) is a cytokine of the IL-1 cytokine family that promotes the resolution of inflammation. Resolution mechanisms comprise the induction or recovery of immune tolerance that is lacking in various acute and chronic inflammatory pathologies, including Graft-versus-Host Disease (GvHD). The role of IL-38 in the context of immune tolerance, its primary immune cell targets and underlying molecular mechanisms are not defined. In this study, we investigated the impact of IL-38 on human alloreactivity and in a mouse model of acute GvHD. Our data suggests that monocytes differentiating into macrophages are the main cellular target of IL-38. Specifically, IL-38 reduces antigen presentation capacity in differentiating monocytes through an IL-1 family receptor-independent mechanism, which subsequently avoids T-cell activation. In parallel, IL-38 ameliorates inflammation in allogeneic settings in human and murine GvHD models by promoting the expansion of regulatory T-cells. Our findings indicate that IL-38 promotes immune tolerance during alloreactivity by affecting myeloid cells and T-cells.