Interstitial lung diseases (ILDs) are chronic irreversible pulmonary conditions with significant morbidity and mortality. Diagnostic approaches to ILDs are complex and multifactorial. Effective therapeutic interventions are continuously investigated and explored with substantial progress, thanks to advances in basic understanding and translational efforts. Extracellular vesicles (EVs) offer a new paradigm in diagnosis and treatment. This leads to two significant implications: new disease biomarker discovery that enables reliable diagnosis and disease assessment and the development of regenerative medicine therapeutics that target fibroproliferative processes in diseased lung tissue. In this review, we discuss the current understanding of the role of diseased tissue-derived EVs in the development of interstitial lung diseases, the utility of these EVs as diagnostic and prognostic tools, and the existing therapeutic utility of EVs. Furthermore, we review the potential therapeutic application of EVs derived from various cellular sources.