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Chronic rejection predominantly manifested as bronchiolitis obliterans syndrome (BOS), still remains a major problem affecting long-term outcomes in human lung transplantation (LTx). Donor specific antibodies (DSA) and infiltration of neutrophils in the graft have been associated with the development of BOS. This study determines the role of defensins, produced by neutrophils, and its interaction with α-1-antitrypsin (AAT) towards induction of airway inflammation and fibrosis which are characteristic hallmarks of BOS. Bronchoalveolar lavage (BAL) and serum from LTx recipients, BOS+ (n=28), BOS− (n=26) and normal healthy controls (n=24) were analyzed. Our results show that BOS+ LTx recipients had higher α-defensins (HNP1–3) and β-defensin2 HBD2 concentration in BAL and serum compared to BOS-DSA-recipients and normal controls (p=0.03). BOS+ patients had significantly lower serum AAT along with higher circulating concentration of HNP–AAT complexes in BAL (p=0.05). Stimulation of primary small airway epithelial cells (SAECs) with HNPs induced expression of HBD2, adhesion molecules (ICAM and VCAM), cytokines (IL-6, IL-1β, IL-13, IL-8 and MCP-1) and growth-factor (VEGF and EGF). In contrast, anti-inflammatory cytokine, IL-10 expression decreased 2-fold (p=0.002). HNPs mediated SAEC activation was completely abrogated by AAT. In conclusion, our results demonstrates that neutrophil secretory product, α-defensins, stimulate β-defensin production by SAECs causing upregulation of pro-inflammatory and pro-fibrotic signaling molecules. Hence, chronic stimulation of airway epithelial cells by defensins can lead to inflammation and fibrosis the central events in the development of BOS following LTx.