Acute exacerbations are significant events in the course of COPD. The pathogenesis of exacerbations was poorly understood, specifically, the role of bacteria was highly controversial. Recent observations have demonstrated that bacterial infection is involved in about half of the exacerbations. The predominant mechanism of bacterial exacerbation in COPD appears to be acquisition of new strains of bacterial pathogens from the environment that are able to establish infection in the tracheobronchial tree in COPD because of compromised innate lung defenses. These pathogens interact with airway cells, elicit an inflammatory response, which underlies the pathophysiology and symptoms characteristic of exacerbation. An immune response that can be mucosal, systemic or both develops to the infecting bacterial strain. This immune response contains the infectious process, could eradicate the infecting pathogen and prevent re-infection with the same strain. However, because of antigenic diversity among bacterial strains, this immunity tends to be strain-specific rather than widely protective. Other mechanisms, including increase in bacterial load and interaction with other etiologies such as viruses, also could contribute to bacterial exacerbations. Improved understanding of the host-pathogen interaction in the airways in COPD will lead to novel approaches to prevention and treatment of exacerbations.