The cytotoxic agent bleomycin is feared for its induction of sometimes fatal pulmonary toxicity, also known as bleomycin-induced pneumonitis (BIP). The central event in the development of BIP is endothelial damage of the lung vasculature due to bleomycin-induced cytokines and free radicals. Ultimately, BIP can progress in lung fibrosis. The diagnosis is established by a combination of clinical symptoms, radiographic alterations, and pulmonary function test results, while other disorders resembling BIP have to be excluded. Pulmonary function assessments most suitable for detecting BIP are those reflecting lung volumes. The widely used transfer capacity of the lungs for carbon monoxide appeared recently not to be specific when bleomycin is used in a polychemotherapeutic regimen. There are no proven effective treatments for BIP in humans, although corticosteroids are widely applied. When patients survive BIP, they almost always recover completely with normalization of radiographic and pulmonary function abnormalities. This review focuses on BIP, especially on the pathogenesis, risk factors, and its detection.