Hypersensitivity pneumonitis (HP) which can also be called extrinsic allergic alveolitis is a condition that induces inflammation in the alveoli along with the terminal bronchioles. It mostly affects people after they inhale antigenic substances present in the surrounding environment. This reaction occurs in individuals who are genetically predisposed because of prolonged and frequent inhalation of different forms of dusts, microorganisms, avian proteins, fungi, bacteria, and certain chemical compound of low molecular weight. Many factors are thought to affect the development and progression of HP, including the type and amount of the antigen, environmental conditions, antigen exposure frequency and intensity as well as interaction of immunity with offending antigens are all factors to consider. Like the majority of interstitial lung diseases, HP is a rare disorder. Both, incidence and prevalence of HP significantly differs worldwide, depending on the exposure to antigenic substances, geographical or local factors, cultural factors and genetic risk factors. The diagnostic criteria of HP rely mainly on a detailed history of exposure to antigen, clinical features, lung functions tests, High Resolution Computed Tomography (HRCT), laboratory tests and physical examination. Hypersensitivity Pneumonitis categorized as acute, subacute and chronic which varies in clinical features together with onset of symptoms. Corticosteroids are generally used in the treatment of HP, immunosuppressants and anti-fibrotic can be used in some HP cases. Lung transplantation is considered in cases where the disease has progressed to the end stages.