Using current immunosuppressive protocols, rejection is common after lung transplantation. Most recipients have at least one episode of acute rejection, and approximately 25 percent of recent long-term survivors have developed chronic rejection. Acute rejection has usually been reversible with treatment, but chronic rejection has responded poorly, relapsed frequently, and been one of the leading causes of late morbidity and mortality. Appropriate management of rejection is predicated on timely, accurate diagnosis. Clinical criteria for the diagnosis of acute rejection are useful but nonspecific, and TBB has emerged as the procedure of choice for diagnosing acute rejection and infection. Chronic rejection is manifested by OB and is characterized physiologically by the development of airflow obstruction. Although histologic confirmation is preferable, the sensitivity of TBB for the detection of OB has been inconsistent, and the specificity has been low. Lung transplantation has indeed come of age, but understanding the immunopathogenesis and improving the clinical management of rejection remain major challenges for the next decade.