This comprehensive review examines the diagnostic potential of bronchoalveolar lavage (BAL) in interstitial lung disease (ILD), emphasizing its accuracy and significance in various ILDs, including idiopathic pulmonary fibrosis (IPF), sarcoidosis, hypersensitivity pneumonitis, and connective tissue disease-associated ILD. The analysis underscores the importance of abnormalities in both cellular and non-cellular components of BAL fluid for precise ILD diagnosis. Recommendations advocate for the integration of BAL into clinical guidelines, a multidisciplinary diagnostic approach, and further standardization of procedures. Looking toward the future, ongoing research highlights technological advancements, biomarker discovery, and the integration of artificial intelligence in BAL interpretation. These developments not only promise to enhance ILD diagnosis but also offer prospects for a more personalized approach to patient management based on insightful patient stratification guided by BAL findings. This abstract encapsulates the key findings, recommendations, and future prospects identified in the review, providing a concise overview of the diagnostic potential of BAL in ILD.