Recent years have seen a robust influx of exciting new observations regarding the mechanisms that regulate the initiation and progression of pulmonary fibrosis but the pathogenesis remains poorly understood. The search for an alternative hypothesis to unremitting, chronic inflammation as the primary explanation for the pathophysiology of idiopathic pulmonary fibrosis (IPF) derives, in part, from the lack of therapeutic efficacy of high-dose immunosuppressive therapy in patients with IPF. The inflammatory hypothesis of IPF has since been challenged by the epithelial injury hypothesis, in which fibrosis is believed to result from epithelial injury, activation, and/or apoptosis with abnormal wound healing. This hypothesis suggests that recurrent unknown injury to distal pulmonary parenchyma causes repeated epithelial injury and apoptosis. The resultant loss of alveolar epithelium exposes the underlying basement membrane to oxidative damage and degradation. Emerging concepts suggest that IPF is the result of epithelial-mesenchymal interaction. The initiation of this fibrotic response may depend upon genetic factors and environmental triggers; the role of Th1 or Th2 cell-derived cytokines may also be important. This process appears to be unique to usual interstitial pneumonia/IPF. It is clear that IPF is a heterogeneous disease with variations in pathology, high-resolution computed tomography findings, and patterns of progression. Idiopathic pulmonary fibrosis is a complex disorder, and no unifying hypothesis has been identified at present that explains all the abnormalities.