More effective immunosuppressants are needed to improve lung-transplantation survival. PX3.102 is a novel immunosuppressant isolated from a mixture of traditional Chinese herbs. We tested its protective role on chronic lung rejection in the heterotopic tracheal transplant model. C57BL/6 mice received BALB/c tracheal grafts and were treated with PX3.102, cyclosporine A, or vehicle. PX3.102 improved tracheal allograft lumen patency (*P<0.01 vs. vehicle and P=0.14 vs. cyclosporine A) but not epithelialization (P>0.2 vs. vehicle). Subsequent in vitro studies demonstrated that PX3.10 was toxic to fully differentiated human tracheal epithelial cells in a dose-dependent manner. PX3.102 markedly suppressed antigen-specific lymphocyte proliferation in vitro at a concentration 10 times lower than cyclosporine A. In conclusion, PX3.102, a promising and potent immunosuppressant, although exhibiting toxicity to airway epithelial cells at high doses, is effective in inhibiting chronic airway allograft rejection.