A small subset of patients with coeliac disease become refractory to a gluten-free diet with persistent malabsorption and intestinal villous atrophy. The most common cause of this condition is inadvertent gluten exposure, but concomitant diseases leading to villous atrophy should also be considered and excluded. After exclusion of these conditions, patients are referred to as having refractory coeliac disease, of which two categories are recognized based on the absence (type I) or presence (type II) of a clonal expansion of premalignant intraepithelial lymphocyte population with a high potential for transformation into an overt enteropathy-associated T-cell lymphoma. Type I disease usually has a benign course that can be controlled by mild immunosuppressive treatment, but type II can be more severe with cladribine with or without autologous stem cell transplantation effective as treatment. Patients who fail to respond to cladribine therapy, however, still have a high risk of malignant transformation. Insights into the immunophenotype of these cells and the recognition that type II disease is a low-grade, no-mass lymphoma opens avenues for new treatment strategies, including chemotherapeutic and immunomodulating strategies. This Review will provide an overview of refractory coeliac disease, discussing mechanisms, diagnosis and management.