Twenty-four (2 x 12) patients with intestinal graft versus host disease (GVHD) Grades 2, 3 or 4 will be treated with budesonide 3mg three times daily or placebo for 12 weeks. All of the patients will receive cyclosporine and by mouth (po) prednisone or intravenous (IV) methylprednisone with a starting dose of 2mg/kg/day (standard anti-GVHD treatment). Doses of steroids will be decreased by approximately 10% or 10mg per week (depending upon patient’s weight) upon response to therapy, defined as a decrease of volume of diarrhea by 50% per day, decrease in abdominal pain and no presence of bloody stool. Patients with Grades 3 or 4 will be withdrawn from the study if there is no response after one week of therapy. Patients with Grade 2 may continue with no decrease in prednisone dose until response is achieved.