RationaleThe diffusing capacity of the lung for carbon monoxide corrected for haemoglobin (D_LCOcor) measures gas movement across the alveolar–capillary interface. We hypothesised that D_LCOcor is a sensitive measure of injurious allograft processes disrupting this interface.ObjectivesTo determine the prognostic significance of the D_LCOcor trajectory on chronic lung allograft dysfunction (CLAD) and survival.MethodsA retrospective analysis was conducted of all bilateral lung transplant recipients at a single centre, between January 1998 and January 2018, with one or more D_LCOcor measurements. Low baseline D_LCOcor was defined as the failure to achieve a D_LCOcor >75% predicted. Drops in D_LCOcor were defined as >15% below recent baseline.Results1259 out of 1492 lung transplant recipients were included. The median (range) time to peak D_LCOcor was 354 (181–737) days and the mean±sdD_LCOcor was 80.2±21.2% pred. Multivariable analysis demonstrated that low baseline D_LCOcor was significantly associated with death (hazrd ratio (HR) 1.68, 95% CI 1.27–2.20; p<0.001). Low baseline D_LCOcor was not independently associated with CLAD after adjustment for low baseline forced expiratory volume in 1 s or forced vital capacity. Any D_LCOcor declines ≥15% were significantly associated with death, independent of concurrent spirometric decline. Lower percentage predicted D_LCOcor values at CLAD onset were associated with shorter post-CLAD survival (HR 0.75 per 10%-unit change, p<0.01).ConclusionLow baseline D_LCOcor and post-transplant declines in D_LCOcor were significantly associated with survival, independent of spirometric measurements. We propose that D_LCOcor testing may allow identification of a subphenotype of baseline and chronic allograft dysfunction not captured by spirometry. There may be benefit in routine monitoring of D_LCOcor after lung transplantation to identify patients at risk of poor outcomes.