Lung transplantation is an established treatment of well-selected patients with end-stage respiratory diseases. However, lung transplant recipients have the highest rates of acute and chronic rejection among transplanted solid organs. Owing to ongoing alloimmune recognition and associated immune-driven airway/vascular remodeling, precipitated by multifactorial, endogenous or exogenous, post-transplant injuries to the bronchovascular axis of the secondary pulmonary lobule, most lung transplant recipients will suffer from a pathophysiological decline of their allograft, either functionally and/or structurally. This review discusses current knowledge, barriers, and gaps in acute cellular rejection and chronic lung allograft dysfunction-the greatest impediment to long-term post-transplant survival.