Antibody-mediated rejection (AMR) is a principal cause of acute and chronic failure of lung allografts. However, mechanisms mediating this oftentimes fatal complication are poorly understood. Here, we show that Foxp3 + T cells formed aggregates in rejection-free human lung grafts and accumulated within induced bronchus-associated lymphoid tissue (BALT) of tolerant mouse lungs. Using a retransplantation model, we show that selective depletion of graft-resident Foxp3 + T lymphocytes resulted in the generation of donor-specific antibodies (DSA) and AMR, which was associated with complement deposition and destruction of airway epithelium. AMR was dependent on graft infiltration by B and T cells. Depletion of graft-resident Foxp3 + T lymphocytes resulted in prolonged interactions between B and CD4+ T cells within transplanted lungs, which was dependent on CXCR5-CXCL13. Blockade of CXCL13 as well as inhibition of the CD40 ligand and the ICOS ligand suppressed DSA production and prevented AMR. Thus, we have shown that regulatory Foxp3 + T cells residing within BALT of tolerant pulmonary allografts function to suppress B cell activation, a finding that challenges the prevailing view that regulation of humoral responses occurs peripherally. As pulmonary AMR is largely refractory to current immunosuppression, our findings provide a platform for developing therapies that target local immune responses.