Type 1 regulatory T (TR1) cells are Foxp3− interleukin-10 (IL-10)–producing CD4+ T cells with potent immunosuppressive properties, but their requirements for lineage development have remained elusive. We show that TR1 cells constitute the most abundant regulatory population after allogeneic bone marrow transplantation (BMT), express the transcription factor Eomesodermin (Eomes), and are critical for the prevention of graft-versus-host disease. We demonstrate that Eomes is required for TR1 cell differentiation, during which it acts in concert with the transcription factor B lymphocyte–induced maturation protein-1 (Blimp-1) by transcriptionally activating IL-10 expression and repressing differentiation into other T helper cell lineages. We further show that Eomes induction in TR1 cells requires T-bet and donor macrophage–derived IL-27. Thus, we define the cellular and transcriptional control of TR1 cell differentiation during BMT, opening new avenues to therapeutic manipulation.