Lung transplantation is a life-saving therapy for several end-stage lung diseases. However, lung allografts suffer from the lowest survival rate predominantly due to rejection. The pathogenesis of alloimmunity and its role in allograft rejection has been extensively studied and multiple approaches have been described to induce tolerance. However, in the context of lung transplantation, dysregulation of mechanisms, which maintain tolerance against self-antigens, can lead to lung-restricted autoimmunity, which has been recently identified to drive the immunopathogenesis of allograft rejection. Indeed, both preexisting as well as de novo lung-restricted autoimmunity can play a major role in the development of lung allograft rejection. The three most widely studied lung-restricted self-antigens include collagen type I, collagen type V, and k-alpha 1 tubulin. In this review, we discuss the role of lung-restricted autoimmunity in the development of both early as well as late lung allograft rejection and recent literature providing insight into the development of lung-restricted autoimmunity through the dysfunction of immune mechanisms which maintain peripheral tolerance.