Obliterative bronchiolitis remains the major obstacle to long-term survival after lung transplantation. Herein we provide a brief review of the key literature as well as our own experience with this condition. Obliterative bronchiolitis has occurred in up to two-thirds of all lung transplant recipients. The characteristic physiologic changes include declines in (1) forced expiratory volume in 1 second, (2) forced vital capacity, and (3) diffusing capacity of the lungs for carbon monoxide. Lung biopsy in patients with obliterative bronchiolitis reveals occlusion of bronchioles in a patchy but extensive distribution. Mucous plugging and bronchiectasis may also be seen. Furthermore, intimal thickening of pulmonary vessels together with mild arteriosclerotic changes of the muscular and elastic pulmonary arterioles may be observed. To date, the main risk factor for the development of obliterative bronchiolitis is recurrent, severe, and persistent acute lung rejection. The recommended management is prevention because the established fibrotic condition may necessitate re-transplantation.