Radiation therapy (RT) is an important treatment modality for multiple thoracic malignancies. Incidental irradiation of the lungs, which are particularly susceptible to injury, is unavoidable and often dose-limiting. The most radiosensitive subunit of the lung is the alveolar/capillary complex, and RT-induced lung injury is often described as diffuse alveolar damage. Reactive oxygen species generated by RT are directly toxic to parenchymal cells and initiate a cascade of molecular events that alter the cytokine milieu of the microenvironment, creating a self-sustaining cycle of inflammation and chronic oxidative stress. Replacement of normal lung parenchyma by fibrosis is the culminating event. Depending on the dose and volume of lung irradiated, acute radiation pneumonitis may develop, characterized by dry cough and dyspnea. Fibrosis of the lung, which can also cause dyspnea, is the late complication. Imaging studies and pulmonary function tests can be used to quantify the extent of lung injury. While strict dose-volume constraints to minimize the risk of injury are difficult to impose, substantial data support some general guidelines. New modalities such as intensity-modulated radiation therapy and stereotactic body radiation therapy provide new treatment options but also pose new challenges in safely delivering thoracic RT.