Bronchiolitis obliterans syndrome (BOS), characterized by progressive airflow obstruction, is the main barrier to long-term graft survival after lung transplantation. Despite extensive studies, the mechanisms underlying BOS remain poorly understood, and targeted interventions have not yet been fully developed. In the present study, we employed a mouse model of tracheal transplantation and demonstrated that blockade of HMGB1 alone or combined with heparanase (HPSE) attenuates the development of BOS. It was noted that HMGB1 was first passively released from necrotic/damaged cells as a result of early unavoidable allograft injuries, leading to macrophage infiltration along with HMGB1 active secretion. Mechanistic studies revealed that extracellular HMGB1 acted through its receptor, RAGE, to activate NF-kappa B, which then bound to the HPSE promoter to transcribe its expression. The enhanced HPSE next released HS-bonded latent TGF-beta from myofibroblast ECM by cleaving HS chains to promote the initiation and progression of BOS. Together, our data suggest that HMGB1 and HPSE could be viable targets for prevention and intervention of fibrotic diseases such BOS after lung transplantation.