Systemic sclerosis is an autoimmune connective tissue disorder characterized by fibrosis of the skin and visceral organs. Interstitial lung disease (ILD) is a major complication of this disease and along with pulmonary arterial hypertension is the leading cause of mortality in scleroderma patients. The pathogenesis of pulmonary fibrosis is characterized by epithelial cell injury, activation of the coagulation pathway and inflammation, which create a profibrogenic environment in the lung in the setting of autoimmunity. The current standard of treatment for ILD in systemic sclerosis is cyclophosphamide. In view of the modest benefits in pulmonary function seen with cyclophosphamide in two recent trials and its significant toxicity, the search for alternative treatments is ongoing. With the advances in our understanding of the pathogenic mechanisms of pulmonary fibrosis, many promising therapeutic agents have come into view, but their efficacy needs to be evaluated before they can be recommended clinically. This review discusses the pathogenesis of pulmonary fibrosis with a focus on the potential target pathways, the current treatment options and recent advances in the treatment of ILD in systemic sclerosis.