With increasing use of immune checkpoint inhibitors (ICIs) for advanced NSCLC, there is increasing recognition of immune-related adverse events associated with ICI use. We recently reported increased incidence of checkpoint inhibitor pneumonitis (CIP) in ICI-treated NSCLC patients. Since development of immune-related adverse events in other organ systems has been associated with either no change or even improvement in tumor response/cancer outcomes, we sought to better understand the impact of CIP development on overall survival in ICI-treated NSCLC patients. Using baseline and follow-up data collected on a cohort of 205 ICI-treated NSCLC patients, we used a multi-state modeling approach to understand the effect of developing CIP on the risk of death. We observed time-dependent changes in risk of developing and recovery from CIP, with an increased risk of both developing and recovering from CIP in the first year after initiating ICI. We found that developing CIP independently increased the risk of transitioning to death in both adjusted and unadjusted models. In the multivariate model, we found that the increase in mortality associated with CIP was only seen in patients with adenocarcinoma tumor histology. Collectively, these findings suggest that in NSCLC, development of CIP worsens survival in patients receiving immunotherapy.