Hypersensitivity pneumonitis (extrinsic allergic alveolitis) is an immunological mediated hypersensitivity reaction to a variety of inhaled allergens that may cause an acute and subacute interstitial pneumonitis and may lead to a chronic end-stage lung disease. Though more common in adults, hypersensitivity pneumonitis needs to be considered in the differential diagnosis of interstitial pneumonitis in children. In children, the most common antigens are from residential exposure to birds, humidifiers and indoor molds. Clinical features are dependent upon stage of disease, and can include fevers, chills, cough, dyspnea, fatigue and weight loss. Physical examination often reveals rales, and dyspnea and hypoxemia are usually present. Routine laboratory testing demonstrates a moderately elevated erythrocyte sedimentation rate, leukocyte count, total IgG level and a positive rheumatoid factor. Though serum IgG antibodies are elevated to the inhaled antigen(s) in hypersensitivity pneumonitis, they may be present in asymptomatic exposed individuals. The immunopathogenesis involves cellular immunity to inhaled allergens, especially CD8+ cytotoxic T cells, multinucleated giant cells, and ultimately granulomas. The role of antigen-specific IgG antibodies is unclear, but may be involved in antibody-dependent-cellular-cytotoxicity (ADCC) and/or interaction with FcRg on dendritic cells and monocytes that enhance a Th1 response. Pulmonary function studies demonstrate a restrictive pattern with a diffusion defect resulting in hypoxemia. Radiographic changes vary according to the stage of the disease and are best evaluated by high resolution computerized tomography. Bronchoalveolar lavage demonstrates a lymphocytosis with characteristic increase of CD8+ T cells and NK cells. However, recent literature suggests that the CD4+/CD8+ ratio may not be decreased in children as found in adults. Treatment of hypersensitivity pneumonitis is antigen avoidance and systemic corticosteroids, and prognosis depends on early recognition of the disease.