Allogeneic hematopoietic cell transplantation (allo-HCT) is an effective therapeutic procedure to treat hematological malignancies. However, the benefit of allo-HCT is limited by a major complication, chronic graft-versus-host disease (cGVHD). Since transmembrane and secretory proteins are generated and modified in the endoplasmic reticulum (ER), the ER stress response is of great importance to secretory cells including B cells. By using conditional knock-out (KO) of XBP-1, IRE-1α or both specifically on B cells, we demonstrated that the IRE-1α/XBP-1 pathway, one of the major ER stress response mediators, plays a critical role in B cell pathogenicity on the induction of cGVHD in murine models of allo-HCT. Endoribonuclease activity of IRE-1α activates XBP-1 signaling by converting unspliced XBP-1 (XBP-1u) mRNA into spliced XBP-1 (XBP-1s) mRNA but also cleaves other ER-associated mRNAs through regulated IRE-1α-dependent decay (RIDD). Further, ablation of XBP-1s production leads to unleashed activation of RIDD. Therefore, we hypothesized that RIDD plays an important role in B cells during cGVHD development. In this study, we found that the reduced pathogenicity of XBP-1 deficient B cells in cGVHD was reversed by RIDD restriction in IRE-1α kinase domain KO mice. Restraining RIDD activity per se in B cells resulted in an increased severity of cGVHD. Besides, inhibition of RIDD activity compromised B cell differentiation and led to dysregulated expression of MHC II and costimulatory molecules such as CD86, CD40, and ICOSL in B cells. Furthermore, restraining the RIDD activity without affecting XBP-1 splicing increased B cell ability to induce cGVHD after allo-HCT. These results suggest that RIDD is an important mediator for reducing cGVHD pathogenesis through targeting XBP-1s.