Impairment of pulmonary diffusion is recognized following heart transplantation. This study was undertaken to determine the histopathological basis for the defect in pulmonary physiology. Heart transplant recipients (HTR) entered into a prospective study of post-transplant pulmonary physiology were asked to undergo bronchoscopy, bronchoalveolar lavage (BAL) and transbronchial biopsy (n = 18) in the presence of impaired gas transfer. Transbronchial biopsies were examined under light microscopy and demonstrated focal interstitial fibrosis in 12 patients, cytomegalovirus disease in four patients and Pneumocystis carinii pneumonia in three patients. Bronchoalveolar lavage differential counts were normal in HTR but BAL macrophages contained haemosiderin. The histological features of interstitial fibrosis may underlie the fall in gas transfer seen following heart transplantation. The presence of haemosiderin-laden macrophages late following heart transplantation suggests a capillary leak syndrome.