Inclusion Criteria:

• Patient may be transplanted with stem cells from any source using either a myeloablative or nonmyeloablative preparative regimen
• Patient may be any age
• Patient must have biopsy proven new onset of aGVHD; Clinical Grading must be II-IV and may occur after stem cell transplant or donor leukocyte infusion (DLI). Patients may begin Etanercept treatment prior to biopsy confirmation of GVHD. Acute GVHD will be determined by clinical presentation and not timing from stem cell infusion
• Patient must be on solumedrol at a dose of 2mg/kg/day of actual body weight for no more than 72 hours prior to the initiation of etanercept
• Patient must have evidence of neutrophil engraftment with an ANC of > 500 for three consecutive days
• Pulse ox > 90% on room air

Exclusion Criteria:

• Pregnancy or nursing mother
• Intolerance or allergic reaction to etanercept
• Previous use of steroids for treatment of acute GVHD
• Active infection, chronic or localized, not responding to antibiotics, with continued signs of infection (patients with a positive C. Difficile test will not be excluded from the study)
• Condition that might predispose to developing serious infections (i.e. active and uncontrolled diabetes mellitus, sickle cell anemia)
• Other investigational agents for the treatment or prophylaxis of graft-vs-host disease within the past 2 weeks
• Serum creatinine > 2.0mg/dl
• Patients being treated for acute pulmonary dysfunction (IPS) study using etanercept
• Patients with hypotension believed to be secondary to sepsis syndrome or heart failure requiring > 1 inotropic agent, or dopamine >5mcg/kg/minute for blood pressure support
• Evidence of congestive heart failure on clinical exam
• Evidence of hepatic dysfunction with an ALT or AST > 2.5 x ULN, not due to GVHD