Primary graft dysfunction (PGD) is a common early complication after lung transplantation. We conducted a retrospective cohort study of 334 recipients to evaluate the impact of PGD graded at 24, 48 and 72 h on the risk of bronchiolitis obliterans syndrome (BOS) development (stage 1) and progression (stages 2 and 3). We constructed multivariable Cox proportional hazards models to determine the risk of BOS attributable to PGD in the context of other potential risk factors including acute rejection, lymphocytic bronchitis and respiratory viral infections. All grades of PGD at all time points were significant risk factors for BOS development and progression independent of acute rejection, lymphocytic bronchitis and respiratory viral infections. Specifically, PGD grade 1 at T24 was associated with a relative risk of BOS stage 1 of 1.93, grade 2 with a relative risk of 2.29 and grade 3 with a relative risk of 3.31. Furthermore, this direct relationship between the severity of PGD and the risk of BOS persisted at all time points. We conclude that all grades of PGD at all time points are independent risk factors for BOS development and progression. Future strategies that might attenuate the severity of PGD may mitigate the risk of BOS.