A small subset of patients with celiac disease become refractory to a gluten-free diet, with persistent or recurrent symptoms of malabsorption and intestinal villous atrophy. This condition, defined as refractory celiac disease (RCD), is diagnosed after other small bowel diseases with villous atrophy are excluded. RCD is subdivided into 2 subgroups: type I RCD and type II RCD (RCDII). This latter condition is considered a low-grade intraepithelial lymphoma and has a poor prognosis. This article reviews the clinical and pathologic features of RCD and recent pathogenic findings in RCDII, offering a model to study how inflammation can drive T-cell lymphomagenesis.