Bronchiolitis obliterans (BO) in children is a relatively rare diagnosis. The increase in lung and bone marrow transplantation in children, however, has led to a heightened interest in BO, as this is one of the important complications of those procedures. This article will discuss BO as an entity that can follow any of several illnesses or toxic exposures, in addition to following allogeneic lung or bone marrow transplantation. The complex and incompletely understood pathology, pathogenesis, and molecular pathology involved in BO remain the subject of ongoing investigations. As the prognosis for BO is uncertain and treatment is often unsuccessful, the continued need for the recognition of surrogate markers for BO in patients at risk and the development of better forms of therapy are paramount. This review will describe our current understanding of BO, and will call attention to those research areas that require continuing efforts in order to prevent or treat this entity.