Severe exacerbations of chronic obstructive pulmonary disease (COPD) are morbid events with slow recovery periods. They consume substantial healthcare resources, and they may cause a more rapid reduction in lung function over time. Quality of life (QOL) deteriorates in patients who experience exacerbations, and the more frequent the exacerbations, the more rapid the decline in QOL. Hospitalizations due to exacerbations account for up to 70% of the cost of medical care for patients with COPD. Patients with more severe COPD have more hospitalizations compared with those with less severe disease. A number of therapeutic interventions reduce the number of exacerbations and hospitalizations due to respiratory disease. The long-acting anticholinergic bronchodilator tiotropium, influenza vaccination, and possibly case management appear to reduce need for hospitalization substantially. COPD management should include drugs and other interventions that reduce the frequency of exacerbations and minimize their negative impact on the clinical course of the disease.