The advent of checkpoint inhibitor immunotherapy has rapidly changed the landscape of the management of cancers. However, its use has also been associated with the rise of immunotherapy-related adverse effects (irAEs). There has been an emergence in recent years of sclerosing cholangitis as a mimic of the classical autoimmune hepatitis irAE. We present a case of a 59-year-old female who received pembrolizumab for stage IV lung adenocarcinoma and developed an immune checkpoint inhibitor (ICI) related sclerosing cholangitis diagnosed on radiological and histopathological grounds. This patient was successfully treated with prednisone, azathioprine, and ursodeoxycholic acid. Clinicians should be aware that ICI sclerosing cholangitis is a rare hepatic complication of ICIs. The workup for ICI-associated mixed liver function test derangement that is steroid resistant should include a magnetic resonance cholangiopancreatography to investigate for changes of sclerosing cholangitis and a liver biopsy if the magnetic resonance cholangiopancreatography is nondiagnostic.