A clinically applicable, standardized method for assessing functional results after lung transplantation is required to evaluate factors that may affect long-term outcome, to permit comparison of results from different centers, and to evaluate results of clinical trials. An ad hoc working group was established under the auspices of the International Society for Heart and Lung Transplantation for the purpose of developing such a clinically applicable system. Chronic allograft dysfunction is often associated with pathologic findings of obliterative bronchiolitis, the cause of which has not been defined. Physiologically, such dysfunction is associated with obstructive airways disease. The group concluded that the forced expiratory volume in 1 second was the most reliable and consistent indicator of graft dysfunction, excluding other identifiable causes. The term bronchiolitis obliterans syndrome was adopted to describe such dysfunction, recognizing that there may or may not be pathologic evidence of bronchiolitis obliterans present. Four stages of bronchiolitis obliterans syndrome were defined, each with two subcategories to indicate whether pathologic evidence of obliterative bronchiolitis had been identified. This working formulation will require reappraisal in the future to reassess its practical application and to make such adjustments as may seem appropriate.