The disease is believed to be induced by a combination of Epstein Barr virus infection and immunosuppression through; immunosuppressive drugs (with case reports of methotrexate and azathioprine), infections such as HIV or chronic viral hepatitis or endogenous T-cell defects.

The onset of the disease results in proliferation of EBV-infected malignant B-cells and a cytotoxic T-cell response which in turn leads to organ infiltration and dysfunction of the affected organs. The disease typically always relapse after successful treatment due to inability of the immune system and current viral drugs to eliminate an EBV-infection. If the onset of the disease can be linked to use of immunosuppressive drugs then discontinuation of these drugs may hinder a relapse. Organs usually affected are the skin, lungs, central nervous system while liver and kidney are affected to lesser extent. The pulmonary complications are usually what leads to death, however, CNS involvement that affects up to one third of the patients can be very severe with mental status changes, ataxia, hemiparesis, seizures, unconsciousness and death, typically followed in that order.

The disease has been seen to transform to diffuse large B-cell lymphoma and while LYG is graded I-III based on the number of large EBV-positive B-cells, grade II and III can be considered as a variant of T-cell rich diffuse large B-cell lymphoma.