Bronchiolitis obliterans, a form of chronic allograft rejection characterized by progressive fibrous obliteration of the airways, is the major obstacle limiting prolonged survival of lung transplant recipients. To date, no effective therapy against this fatal complication exists. Interleukin-10 (IL-10), an anti-inflammatory and immunosuppressive cytokine, inhibits various T cell and antigen-presenting cell functions. We examined the effect of IL-10 in an animal model for bronchiolitis obliterans. A heterotopic tracheal transplant model was used. IL-10 was administered to the recipient either in its recombinant form by osmotic minipump or by adenoviral-mediated IL-10 gene transfer (Ad5E1mIL-10). Successful gene transfection and expression was confirmed by measuring circulating IL-10 protein. Tracheal allografts were assessed histologically based on a scoring system. IL-10 administration (in recombinant form or by gene transfer) inhibited the development of fibrous airway obliteration 3 weeks after transplantation in comparison to untreated controls (p < 0.05). This was demonstrated only if the delivery was initiated 5 days after transplantation and not if it was started at the time of transplantation. A single administration of the gene construct was sufficient to achieve the desired effect. We have shown that IL-10 can prevent the development of airway fibro-obliteration in this model. Gene transfection at a site distant from a graft can be used to produce a desired effect on the graft. IL-10 may be of major importance in the control of post-transplant bronchiolitis obliterans. The timing of its administration is critical and further studies are required to determine the mechanisms underlying the observed effects of IL-10.