Lung transplantation (LTx) is the only therapeutic option for many patients with chronic lung disease. However, long-term survival after LTx is severely compromised by chronic rejection (chronic lung allograft dysfunction [CLAD]), which affects 50% of recipients after 5 years. The underlying mechanisms for CLAD are poorly understood, largely due to a lack of clinically relevant animal models, but lymphocytic bronchiolitis is an early sign of CLAD. Here, we report that lymphocytic bronchiolitis occurs early in a long-term murine orthotopic LTx model, based on a single mismatch (grafts from HLA-A2: B6–knockin donors transplanted into B6 recipients). Lymphocytic bronchiolitis is followed by formation of B cell–dependent lymphoid follicles that induce adjacent bronchial epithelial cell dysfunction in a spatiotemporal fashion. B cell deficiency using recipient μMT–/–mice prevented intrapulmonary lymphoid follicle formation and lymphocytic bronchiolitis. Importantly, selective inhibition of the follicle-organizing receptor EBI2, using genetic deletion or pharmacologic inhibition, prevented functional and histological deterioration of mismatched lung grafts. In sum, we provided what we believe to be a mouse model of chronic rejection and lymphocytic bronchiolitis after LTx and identified intrapulmonary lymphoid follicle formation as a target for pharmacological intervention of long-term allograft dysfunction after LTx.