Birt-Hogg-Dubé (BHD) syndrome is a rare disorder inherited in an autosomal dominant manner. The affected patients are predisposed to the development of cutaneous fibrofolliculomas, renal cell tumors and lung cysts with recurrent pneumothorax. The responsible gene for this syndrome is named BHD gene which is mapped in the region of chromosome 17p11.2. Based on the neoplastic changes in the skin and the kidney, BHD gene is regarded as a tumor-suppressor gene. However, detailed mechanism of tumorigenesis is not well understood. In this review, we summarize current understanding of BHD syndrome with special attention to the pathophysiology of lung cysts formation. Recent findings of the roles of BHD gene and its-encoding protein folliculin (FLCN) using rodent models are also discussed.