The anti-inflammatory effects of macrolide antibiotics are of emerging importance. Over the past 20 years, chronic inflammatory respiratory conditions, including diffuse panbronchiolitis, cystic fibrosis and asthma have benefited from long-term low-dose macrolide therapy. Obliterative bronchiolitis, a form of chronic allograft dysfunction in lung transplant recipients, has been reported to be a condition in which macrolide therapy may be indicated. A number of recent cohort studies have been encouraging. Disease progression was delayed with macrolide antibiotic therapy as patients showed a sustained improvement in pulmonary function tests. Up to now, obliterative bronchiolitis has been resistant to most forms of proposed treatment. This review aims to highlight the etiology of obliterative bronchiolitis, the mechanisms of immunomodulation associated with macrolide therapy and how macrolide therapy may be effective by way of these possible mechanisms.