Bronchiolitis obliterans syndrome (BOS) after allogeneic hematopoietic cell transplantation (HCT) is associated with high mortality. Purpose: We hypothesized that FAM (inhaled Fluticasone, Azithromycin, and Montelukast) with a brief steroid pulse could avert progression of new-onset BOS. Experimental design: We tested this in a phase II, single-arm, open label, multicenter study (NCT01307462). Results: Thirty-six patients were enrolled within 6 months of BOS diagnosis. The primary endpoint was treatment failure, defined as 10% or greater FEV1% decline at 3 months. At 3 months, 6% (2/36, 95% CI 1%–19%) had treatment failure (vs. 40% in historical controls, p<0.001). FAM was well tolerated. Steroid dose was reduced by 50% or more at 3 months in 48% of patients who could be evaluated (n=27). Patient-reported outcomes at 3 months were statistically significantly improved for SF-36 social functioning score and mental component score, FACT emotional well-being, and Lee symptom scores in lung, skin, mouth, and the overall summary score compared to enrollment (n=24). At 6 months, 36% had treatment failure (95% CI 21%–54%, n=13/36, with 6 documented failures, 7 missing pulmonary function tests). Overall survival was 97% (95% CI 84%–100%) at 6 months. These data suggest that FAM was well tolerated and that treatment with FAM and steroid pulse may halt pulmonary decline in new-onset BOS in the majority of patients and permit reductions in systemic steroid exposure, which collectively may improve quality of life. However, additional treatments are needed for progressive BOS despite FAM.