Diffuse panbronchiolitis is a chronic infectious airway disease that mainly occurs in the Far East. The prognosis for diffuse panbronchiolitis has dramatically improved over the past 10 years with the use of low-dose long-term erythromycin treatment. The beneficial effect of erythromycin and other 14-membered-ring macrolides in this condition is considered to be due to an anti-inflammatory rather than anti-infective mechanism. Recent investigations have revealed many new actions to the airway epithelial and inflammatory cells, e.g., neutrophils, lymphocytes, and macrophages. Furthermore, erythromycin treatment of diffuse panbronchiolitis provides a new understanding of the pathophysiology and the treatment of chronic infectious airway disease.