Azithromycin has been shown to be beneficial in several diseases with chronic neutrophilic inflammation of the airways, such as cystic fibrosis and bronchiolitis obliterans syndrome (BOS) after lung transplantation. Up to now, however, its healing effect on bronchiectasis has never been demonstrated. We report a heart-lung transplant patient who developed chronic rejection (BOS stage 3) with the appearance of gross bronchiectasis on a spiral computed tomography (CT) chest scan. Within 2 weeks after starting azithromycin, the patient's forced expiratory volume in 1 second increased significantly and a repeat spiral CT chest scan 5 months later, showed a major improvement of the bronchiectasis. This case report illustrates that bronchiectasis may greatly improve after treatment with azithromycin and no longer needs to be considered an endstage finding in patients with severe BOS.