Bronchioloalveolar carcinoma (BAC) develops from terminal bronchiolar and acinar epithelia, growing along alveolar septa but without evidence of vascular or pleural involvement. A final diagnosis of BAC can only be achieved from a surgical specimen. Problematically, BAC may exhibit multifocal involvement by means of diffuse aerogenous metastatic spread, making this definition inapplicable for patients with stage IIIB to IV disease from whom only small size biopsy or cytological specimens are obtained. The recent interest and potential importance of BAC and the related peripheral adenocarcinoma (ADC), mixed subtype, is attributable to mounting evidence that some, perhaps many, of what are called peripheral ADCs have arisen from and often contain BAC. BAC, in turn, appears to arise from smaller peripheral nodules, called atypical adenomatous hyperplasia. These developments could account for part of the increase in ADCs noted in some countries, in particular, in East Asia. Interest also stems from the observation that advanced ADC, often with BAC features, are responding in surprising fashion to tyrosine kinase inhibitors. Furthermore, some of the more rapid, dramatic, and durable responses occur when specific mutations in the epidermal growth factor receptor are present. Clinical characteristics often differ from other types of non-small cell lung cancers. These include frequent female occurrence, especially in East Asians; no or less smoking history; an often indolent course; distinctive chest computed tomographic findings; frequent presentation as an asymptomatic, sometimes small, peripheral nodule(s)/mass; multifocal/synchronous primary tumors; and less frequently as pneumonic-type consolidation or diffuse, inoperable lesions, the latter two often with bronchorrhea, and with chest-only disease. Relapses also are predominantly pulmonary, perhaps related to aerogenous spread, and responsible for mortality. Lobectomy is the treatment of choice for cure, even with pneumonic consolidation, but lesser procedures such as wedge resection or segmentectomy may be considered for what might be multifocal, synchronous primary tumors and for pulmonary relapses. Because of frequent lung-only recurrences, lung transplantation, although performed rarely, may hold promise.