A 61-year-old man with superficial bladder cancer, which was detected after he complained of hematuria, was treated three times with intravesical BCG administration. Since liver dysfunction was detected thereafter, he was admitted to our hospital. Three days after admission, he complained of dyspnea on exertion associated with severe hypoxemia, as well as abnormal findings on chest X-ray, i.e. extensive bilateral lung densities. We performed bronchoscopic examination and obtained bronchoalveolar lavage fluid (BALF) and lung biopsy specimens (TBLB). In the BALF, a marked increase in the total cell number, particularly lymphocytes with a high CD4/CD8 ratio was noted. TBLB specimens revealed the lesions to be numerous non-caseating granulomas. We failed to obtain definite evidence of BCG in the sputum, urine, blood, and BALF. Instead, we found that a lymphocyte stimulation test for BCG (DLST) was strongly positive. Based on these findings, severe interstitial pneumonia probably induced by hypersensitivity against BCG, was diagnosed. Anti-tuberculous agents, and steroid-pulse therapy followed by oral administration of relatively low dose of steroid ameliorated the abnormal conditions, including chest X-ray film findings and hypoxemia. The population of lymphocytes and CD4/CD8 ratio in the BALF were reduced as well. Serious interstitial pneumonia was induced by the intravesical administration of BCG, which resulted in transitional changes in the BALF cell component.