OBJECTIVE: Dysregulated repair following epithelial injury is a key forerunner of disease in many organs, and the acquisition of a mesenchymal phenotype by the injured epithelial cells (epithelial to mesenchymal transition, EMT) may serve as a source of fibrosis. The macrolide antibiotic azithromycin and the DNA synthesis inhibitor mycophenolate are in clinical use but their mechanism of action remains unknown in post-transplant bronchiolitis obliterans syndrome (BOS). Here we determined if regional variation in the EMT response to TGFß1 underlies the bronchiolocentric fibrosis leading to BOS and whether EMT could be inhibited by azithromycin or mycophenolate. METHODS/RESULTS: We found that small and large airway epithelial cells from stable lung transplant patients underwent EMT when stimulated with TGFß1, however mesenchymal protein expression was higher and loss of epithelial protein expression more complete in small airway epithelial cells. This regional difference was not mediated by changes in expression of the TGFßRII or Smad3 activation. Azithromycin potentially inhibited EMT in both small and large airway epithelial cells by inhibiting Smad3 expression, but not activation. CONCLUSION: Collectively, these observations provide a biologic basis for a previously unexplained but widely observed clinical phenomena, and a platform for the development of new approaches to fibrotic diseases.